Ukrainian subscribers lose hundreds of millions of hryvnias due to content service schemes

12-03-2021

Better Regulation Delivery Office (BRDO) submitted a formal appeal to the Prime Minister of Ukraine, the Verkhovna Rada Committee on Digital Transformation, and the Office of the President of Ukraine regarding violations of consumer rights in the provision of content services and the need to address this problem immediately.

The draft decision that will resolve the situation has been considered for more than a year and a half — mobile operators are deliberately delaying the process. The document is currently being approved by the State Regulatory Service and then can finally be submitted to the Government.

Background

Mobile subscribers are increasingly complaining about being charged for content services they did not order. These are jokes, SMS horoscopes, dating clubs, and many other services that mobile operators impose on consumers from year to year. For example, in 2016 – the first half of 2020, the National Commission for State Regulation of Communications and Informatization (NCCIR) has received 1,809 complaints of consumer rights violations in the provision of content services, and the dynamics of complaints is constantly growing.

Due to significant gaps in the legal regulation of the procedure for ordering and providing these services, everything is working against consumers: services are imposed; subscribers are charged without their knowledge; it is impossible to protect the violated rights. Most subscriptions do not require special services: in most cases, subscribers obtain their subscriptions without knowing it, sometimes it is enough to accidentally click on a picture on the Internet on your mobile, or become a victim of a software virus.

“The problem is very serious. All prepaid subscribers are not protected, ie. 86% of mobile subscribers. Market players hide the value of services, but we have indirectly estimated that the volume of the market of content services is at least a billion hryvnias a year. Our goal: subscribers have to pay only for what they really intended to order,” Ihor Samokhodskyi, ICT Sector Head at BRDO, said.

What should be done?

Back in 2019, BRDO experts drew attention to the problem of violations of subscribers’ rights in the provision of content services and proposed mechanisms to address it. One and a half years ago, the NCCIR developed a document designed to regulate the provision of content services — a draft resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Rules for the Provision and Receipt of Telecommunications Services”. It proposes to resolve the problem of unfair receipt of content services by introducing a double acceptance mechanism: subscribers will have at least twice to confirm their desire to purchase a certain service. Moreover, the draft resolution provides for the obligation to inform subscribers when they are charged for some services, as well as the option to block the provision of content services to a particular subscriber.

“Instead of one month specified by law, the draft resolution has been discussed for more than a year and a half. Mobile operators do not support the idea to inform subscribers about write-offs and strengthen the protection of subscribers in general. Therefore, they block the change of rules directly and through their business associations. We emphasize that it is unacceptable to continue using unscrupulous schemes of providing content services,” Ihor Samokhodskyi said.

Currently, the draft resolution has been approved without comments by the Ministry of Digital Transformation, the Administration of the State Service of Special Communication and Information Protection, the Ministry of Economic Development, Trade and Agriculture, the Antimonopoly Committee, the State Service on Food Safety and Consumer Protection, and the Ministry of Finance. Among the central bodies, the final approval by the State Regulatory Service is expected, and then the document can be submitted to the Cabinet of Ministers.

By signing the Association Agreement with the EU, Ukraine has committed itself to ensure a high level of consumer protection and achieve harmonization between Ukrainian and EU consumer protection systems.

BRDO calls on as soon as possible to support the adoption of amendments to the “Rules for the Provision and Receipt of Telecommunications Services” and protect the rights of millions of telecom service consumers.

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