TRAI raised a burning consumer concern; charging VAS without explicit consent unfair

Mobile service providers are waking up to a Telecom Regulatory Authority of India (TRAI) directive issued more than a year ago. The private GSM and CDMA service providers, represented by COAI and AUSPAI, have been joined by the state-run BSNL too in a chorus against TRAI.

The issue pertains to a dated TRAI direction to service providers on the provision of value added services (VAS).

TRAI had, in July 2011, stated, “The service provider shall obtain confirmation from the consumer through consumer originated SMS or e-mail or FAX or in writing within twenty four hours of activation of the value added service and charge the consumer only if the confirmation is received from him for such value added service and shall discontinue such value added service if no confirmation is received from the consumer.”

Unsolicited activation of VAS has been a rampant problem faced by prepaid customers across service providers. VAS services like caller ring-back tone (CRBT) are commonly activated on unsuspecting subscribers and charged up to Rs 30 for a month. This is a significant amount for those subscribers who come on the network with the understanding that they would be using the service mainly for in-bound voice and would only occasionally be making out-bound calls.

Now, consider that a subscriber got his prepaid account recharged with Rs 50 with a validity of 30 days. Automatically, a processing fee of Rs 2 and a service tax of Rs 4.67 would be deducted, leaving the subscriber with a calling value of Rs 43.33 only. This would translate into a weekly calling budget of Rs 10.83 for the subscriber. Now a VAS of Rs 30 is force-executed onto the account, without the explicit consent of the subscriber, he or she would suddenly discover that the calling value has been exhausted and that an out-bound call can no longer be made at a time when it is direly needed. What if there is an emergency at hand?

Many of such subscribers even have SIMs with ‘life-time validity,’ which means their service providers took them onto the networks with the only explicit commitment of the lifetime validity fee that was paid. It was left to the subscribers’ will whether and when or how much recharge they would be doing.

If a VAS recharge is effected by any other means, intentional or system-generated, that may best be seen as a breach of the commitment by the service providers and hence the TRAI directive becomes very much pertinent.

Operators don’t seem to agree. They have approached the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the TRAI directive and have even reportedly questioned TRAI’s jurisdiction on the matter.

An argument that has often been stated against the efficacy of a consumer-originated SMS or e-mail is that many consumers either don’t know to read and write or even if they do are SMS and email-illiterate.

Well, if that is the case, then it is also very likely that many consumers would not even realize that their money had been consumed due to VAS activation and would instead assume that they would have talked for a longer period or somebody else in the family or friend circle would have made calls or SMSs.

A rough understanding is that at least 20 percent of the VAS revenues is not consented for by subscribers. Is that fair? Shouldn’t the service providers have proactively worked to find alternative and effective ways to address the issue?

One simple way would be to enable the end channel partners i.e. the SIM card retailers and recharge agents. Consumers anyways go for recharge to these channels, who could activate or deactivate a required VAS on their behalf, with active consent. The day-to-day proximity would ensure that these partners won’t misguide the subscribers who are their local customers for a variety of other services as well.

This is a simplistic description of how the process would work, and of course, further fine-tuning of the process would make it more effective. In fact, enabling these channels could also help build awareness about the benefits of various value added services and make the VAS market grow in a healthier manner.