Submitted by Mike Grenville on Thu, 16 Nov 2006 14:37

Vodafone customers in the UK are receiving an additional charge of 12p on Premium Rate text messages across all price points.

An aggregator has discovered that all PSMS messages through Vodafone in the UK across all price points from 25p through to the maximum £1.50 are having an extra 12p added to their bill. The extra charge only came to light following a customer complaint to an aggregator.

Assuming that this is a technical error, this will be netting Vodafone an estimated £360,000 pounds a week in additional revenues. If it comes to offering refunds to those over charged, the refund flow from operator to aggregator, service providor and end user is tricky to implement for PSMS.

So far Vodafone has declined to comment on this additional charge which appears to have been in place for some weeks.

“So far, Premium SMS (PSMS) has been the primary method used for consumers to purchase content on their phone,” says Raomal Perera, CEO of payment specialist Valista. “For the content market to grow successfully, the pricing of off-portal transactions urgently requires greater visibility and flexibility than PSMS allows, as this incident with Vodafone has shown.”

“The PSMS billing method has, indeed, given rise to several concerns among operators, content providers and consumers alike. Among them is the absence of credit checks, fraud protection, flexible charging and pricing transparency. Operators are now looking to suitable alternatives in order to prevent any such issues with PSMS damaging their reputations which they have spent millions building. One such alternative is direct-to-bill charging, which is seen as a more robust payment mechanism. With direct-to-bill Vodafone would be able to bill consumers more accurately and provide an appropriate level of security, fraud protection and transparency.”