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Friday, August 8, 2014

Value Added Services by Telecom Services Providers- Is it failure of regulations or Is there any hidden agenda?



Value Added Services (VAS) – Unethical Trade Practices of activation and renewal without seeking subscriber’s consent - Is it not the Anti-consumer Practices by the Telecom Service Providers?






The Telecom Industry has grown over a period. With growth of telecom industry, the problem being faced by the subscribers also have increased with newer and newer problems. The total number of mobile subscribers is estimated to be about 90 crores. More than 96% of the mobile subscribers are in the category of prepaid connection. More than 70% of the subscribers belong to under privileged class of society.

           One of the unethical practices being followed by the telecom service provider is the activation of certain Value Added Services (chargeable) without seeking the subscribers consent. As per TRAI Regulations, the Telecom Service Providers are prohibited from activation of any Value Added Services (VAS) which is on a chargeable basis without seeking explicit consent of subscribers. TRAI also stipulates for the Telecom Service Providers to refund the deducted amount towards activation of value added services within 24 hrs. where the consumer denies activation of such services. 

          However, the things are better said than done. The Telecom Service Providers are activating the services and refunds made only with a rigorous follow up. The subscriber also feel harassed if he has to seek refund of Rs. 30/- or so by making number of complaints or calls. The companies try to justify that the subscribers might have done on its own. The procedure for activation of services as laid down in regulations is so complex that it avoids any wrong or accidental activation. On the other side there is feedback that despite subscribers not giving any consent for activating the chargeable services, the amount gets deducted. Another aspect of the business industry is that more than 70% of the subscribers fall under the category of lower economic and uneducated society and it is very difficult for such subscribers to get deactivation of such Value Added Services. The result is the growth and uninterruptible continuation of unethical business in the telecom sector. We have been receiving feedback from various consumers about such problem being faced by them.

                While there is a tendency by the Telecom Service Provider to activate the Value Added Service without seeking the consent of the subscriber and deduct money from their prepaid balance, the surprising part is that the companies continues to renew the service on its own on the expiry of the validity of the period of VAS. This part of action by the Telecom Service Provider is supported by TRAI Regulations that if the customer does not make request for deactivation of the services within three days prior to the expiry of Value Added Services, the service can be auto renewed by the service providers. This regulation itself is against the interest of the consumer and pro-telecom service providers.  Usually the services are sold when it is sought not otherwise i.e services are being sold even if no confirmation of requirement is received.

              When the subscriber is unable to get deactivation done in the first instance at the initial stage of activation, how he/she would be able to get it deactivate at the time of its auto renewal. Secondly if any service has been subscribed for certain validity why the company should renew it automatically is not understood. TRAI regulations also lay down such stipulations that the subscriber should get it deactivated if he/she is not interested in continuing the services beyond its validity period. A common logic demands that the subscribers who would like to continue beyond its expiry should get it renewed.  Thus the TRAI regulation is seen as promoting /concurring with unethical business practice which has been going on in the Telecom Sector duping those categories of the consumers who are of lower economic, unprivilaged and uneducated society.

                Realising the woes of such category of Telecom subscribers, the author of the article who is a consumer activists took up the issue with TRAI and even resorted to RTI Act 2005. The matter was listed before Central Information Commission for a hearing on 17th July 2013. To a question that “Whether the Telecom companies are allowed for auto renewal of Value Added service and special tariff package on expiry of the originally subscribed period without explicit consent of the subscribers”, TRAI informed Central Information Commission that “There are no regulatory guidelines issued from TRAI for disallowing auto-renewal facilities for value added services and special tariff vouchers” This part of the information submitted by the TRAI before CIC itself was wrong as the regulations in force at that time were allowing for auto renewal of VAS beyond validity period. Even where the subscriber did not have balance in the prepaid account, the money is allowed to be deducted on recharging of the connection. Nevertheless Hon’ble Central Information Commission ordered TRAI as “TRAI must evolve clear and categorical guidelines in this matter in next three months time”. A copy of the order was also endorsed to Chairman, TRAI.

                Since the subscribers continued to face the same problem it was again taken under RTI Act 2005 as to whether any definitive guidelines or regulations have been formed or not subsequent to CIC Judgment. The response of TRAI has been very confusing. It seems TRAI is insensitive to the subscriber’s problem belonging to under privileged class.  Even the 7th Amendment of the Telecom Consumer Protection Regulations, 2013 dated 3rd December 2013 as referred in the RTI response dtd. 15/07/2014 does not address the problem related to value added services being faced by the Telecom subscribers.

                As can be seen in Schedule 2 of the said referred amendment the process for deactivation of value added service or that of Special Tariff Package has been framed quite complex in nature over and above the process listed at the step 4 of the Schedule I is in favour of telecom service providers putting telecom subscribers at a loss. The Step 4 of the said schedule is quoted as “the service provider shall, three days before the expiry of the validity period of STV after every renewal, inform the consumer, through SMS, the due date of renewal, the charges for renewal, the terms and conditions of renewal, the toll free short code for deactivation of STV and in case a request for deactivation is not received, renew the STV”. It is not understood why the request for receiving the deactivation at the time of renewal is the pre-requisite especially when the subscriber is not able to get it deactivated at the first instance itself.

                The author therefore recommend as below in the interest of telecom subscribers across the country:- (A link of this article is being mailed to Chairman, TRAI)

(1)    Value added services should not get activated without seeking the consent of the subscribers in explicit manners.
(2)    If the subscribers report for activations of same by the company without seeking the consent of subscribers the company should make refund at 100 times the amount deducted from his repaid balance. This multiplication factor has been taken in an arbitrary manner keeping in view that it should act as a deterrent to the telecom company for unnecessary harassing the consumers.
(3)    The Step 4 as listed in Schedule II may be amended as “on pressing the key for specific STV, an SMS shall be delivered to the consumer informing him that the request to deactivate renewal of the STV has been received and the selected STV shall be deactivated on expiry of its validity period and that he shall receive an SMS confirming the receipt of his request for renewal or activation is not received should not renew the package. It would ensure that the service even accidentally activated at the 1st stage is not renewed subsequently unless and until the subscribers explicitly provided a consent for auto renewal.

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