Liz McManus (Wicklow, Labour)

I support the purpose of this Bill. It makes sense to put the regulation of premium rate telecommunications services under the same roof as the regulator of telephone services by amalgamating ComReg and Regtel. I, like Deputy Coveney, wish the same thinking had led the Minister to the amalgamation of ComReg and the broadcasting authority but that is a matter for another day.

It is worth noting the good work done by Regtel over the years. Self-regulation always has risks but it should be said that Regtel has played a significant role in protecting customers and delivering best practice. It is important that this change upon which we are embarking is for the better and builds on the experience garnered by Regtel since its inception in 2001. ComReg will be in a better position to regulate the industry. It is bigger, better funded and has stronger links with other market players but it is vital that the Minister does not inadvertently or otherwise fall into the trap of weakening the existing powers of regulation.

The Bill deals with two parties, the regulator and the licence holder, and defines clearly the relationship between the two in terms of licensing arrangements, penalties when offences are committed, resourcing and powers and accountability responsibilities similar to those that apply to telecoms and postal services. There is, however, a third party who is central to this debate and should be central to this legislation - the consumer.

The Bill is largely enabling the amalgamation of two bodies but it has a serious flaw, one big hole below the waterline that needs attention: the problem of consumer refunds, which are not mentioned in this legislation. According to the Bill, ComReg "shall notify the provider of the findings and require the provider to remedy any non-compliance or breach". The power to order refunds, however, should be expressly set out in the Bill. In addition, the Bill should empower ComReg to set out in regulations the mechanism for refunds which would not require the wronged consumers to incur time or expense pursuing claims for compensation.

Under the present regime, a code of practice signed up to by service providers, RegTel may order refunds to be made to consumers where necessary. The sums can be high. The last RegTel annual report for 2007-8 lists refunds of approximately €200,000. One case accounted for 85% of the total refunded. Following RegTel's intervention a service was suspended without having resort to any formal procedures. A total of 27,000 consumers were removed from the database with the service provider agreeing to make a voluntary refund of €179,000 to the people affected. This is a significant amount which is greatly appreciated by the customers in question. In the Bill, however, under the proposed new regime there is instead a penalty for overcharging - a fine of up to €5,000 euro in a District Court, with higher penalties in higher courts.

It should be pointed out that overcharging is not the major problem experienced by the public and it makes little sense to single it out for legislative sanction alone. The major problems relate to subscription services and how to get out of them, misleading promotions and failure to warn people when they have exceeded price thresholds.

Last year 6,000 complaints were made to RegTel about subscription services and premium rate services. While the majority of service providers comply fully with the current code of practice there is no doubt that many people including children have been ripped off by a small handful of profiteering shysters. According to the current regulator, up to 95% of companies pose no problem and behave within the law. It is worth noting that under the RegTel regime, Ireland has been free of the television voting scams that have damaged the reputations of BBC, ITV and Channel 4.

The rogues exist, however, and it is vital that customers benefit from this new law. Like other TDs I have received complaints from constituents about the problems they experience. The costs run up by phone customers in many cases were exorbitant. There are many examples where customers were unfairly charged and were then faced with a battle to obtain refunds. For example, one phone customer outlined how he topped up his mobile by €20. Twenty minutes later, although he had made no phone calls he was down to €12 and then €2. His €20 credit was gone within half hour. After making inquiries, he went to ComReg and found that a premium service provider had debited his account. He is convinced he did not send this company anything to authorize them to do this.

Another person had up to €80 taken from his account. Initially this person went to RegTel, ComReg and the Small Claims Court to no avail. RegTel did eventually manage to get on to the company to get the company to write to him.

A constituent contacted me with the following experience:

Yesterday my husband and my son were scammed out of money in the same day. Both were mobile phone scams. The first one was when I logged on to the Irish jobs website and followed a link which called for candidates for castings in the TV show "The Tudors". I put my son's phone number in and then he received 4 texts within a two second period and had lost €20 call credit. I told him to text back stop immediately. I was so annoyed as I had topped up his phone as he is doing the leaving cert and needed his credit. At the very bottom of the web page it said €5 per text but nothing about receiving 4 texts for €20. I contacted the company who said they would refund him, I am very dubious about receiving any money back.

My husband John topped up his phone by €25 yesterday and received a text immediately for something he did not sign up to. He was charged €2.50. When he disputed this with 02 they said he must have signed up to something. He emphatically denies this. They charged him another €2.50 for the stop text he sent.

I also contacted the government agency dealing with this. They did take the details but said we would have to chase any refunds from this companies themselves. By the way they all charge a premium rate while on the phone to them trying to obtain refunds from them.

As my husband did not sign up for anything someone else must have entered his number either by accident getting a digit in their own phone number incorrect, or someone being just malicious. What is to stop anyone logging on to these sites and entering phone numbers of people they have a vendetta against?

Irish Psychics Live is one of the premium rate services run by Realm Communications which has been under the watchful eye of RegTel. In June this year it was reported in the Sunday Tribune that Realm Communications made a pre-tax profit of nearly €1.75million for the year ended 30 April 2008, down from €2.25 million a year previously. This has been put down to the successful "Stop" campaign run by RegTel. The profits in this business are considerable even with an existing code of practice. Retained profits at Realm Communications stand at just under €8.5 million. Realm's directors' pay and other emoluments rose to more than €300,000, up from €135,000 the previous year.

A caller to "Liveline" outlined how he received a bill of €1,108 for one night from Irish Psychics Live. This person had mental health issues but RegTel's code of practice that a call must be terminated by forced release when a charge of €60 is reached was clearly not followed in this case. No prosecution followed.

RegTel has managed to tackle some of the rogue companies to some effect. Among the measures which were somewhat effective was a code of practice which put a limit of €60 cost per call, with a warning given to the customer after having spent €30. A requirement that operators of psychic, tarot and horoscope services must clearly state that they are for entertainment purposes was also welcome. The public campaign educating phone users about how to deal with unwanted texts from service providers was well advertised and effective. This campaign empowers customers to opt out of receiving unwanted texts by simply replying with the word "Stop".

It is clear that we are in a new era of communications. Technology is moving fast and it is difficult for any regulator to keep up to date with companies intent on making profit on the backs of cheating vulnerable people. I would suggest that section 5 be amended to take into account the changing market. ComReg is required in the Bill to list every class or type of PRS that must be licensed. It would be better to have the presumption that services must be licensed and to give ComReg the power to exempt certain classes. This is a safer option and allows for future innovations to be regulated.

The present regulatory system is not perfect but it does allow the current regulator to tell the networks to freeze payments to a service provider for a service in dispute. This is a very useful sanction so why does it not appear in the Bill? Instead, errant service providers can be fined, which is well and dandy, but no consolation to the unfortunate consumer who ran up a huge bill because a service provider "forgot" to send the price warnings it was supposed to. As we all know court proceedings can be slow while a freeze of payments hurts straight away.

To be fair, the Bill sets out a sound legislative basis for the prior licensing of premium rate telecoms services that are necessary and welcome. I applaud the Minister and his Department officials for that, but it is noteworthy that it only deals with two parties, namely, ComReg and the service providers who become licence holders. The consumer is invisible; a powerless bystander in a legislative transaction between the regulator and the regulated. If it were a road traffic measure it would be punishing the bad driver, but offering nothing to the victims who suffer injury. I was a little concerned when the Minister of State said that he would not be proposing any substantial amendments.

I hope that the Minister of State will have an open attitude to the amendments that I will be tabling to this Bill when the time comes. It is a good Bill, but with co-operation, it could be great Bill. For example, section 7 should be expanded to mention refunds explicitly. It needs to be expanded to empower ComReg to deal with minor breaches, which represent the everyday currency of regulation. ComReg needs backing in this Bill to get the people's money back without running down to the courts every time. That power must be incorporated in the Bill if it is not to be challenged in the courts.

Children are vulnerable to exploitation by unscrupulous operators. The Minister for Communications, Energy and Natural Resources has expressed his concern about this issue. He said: "Children especially are inadvertently running up large bills on their mobile phones. Essentially, they are subject to a scam." If the Minister wants to be taken seriously he has an opportunity to add a provision in the Bill that when mobile phones are sold, the name and age of the intended user be registered. In that way, much of the problem of under age access to inappropriate premium rate services can be resolved. No doubt he will encounter opposition from business, but it would be a good safeguard. In the meantime, parents need to register their children's mobile phone with the phone company, making sure the child's age is given.

There is a small matter which may not be significant but is worth mentioning. Section 6 allows for an application to be made to the High Court to suspend a licence. Section 8 allows ComReg to suspend a service. I question whether these provisions should not be in reverse order, so that the first step is for ComReg to stop the service. If that does not work, it asks the High Court to do the job. I suggest that section 8 should come before section 6 and then be followed by section 10, which contains the penalties where an earlier effort fails. The order may not matter, but in the interests of clarity it might be helpful to make the reversal. I propose that ComReg be empowered under section 6 to suspend temporarily any licence either in full or any particular services provided under a licence, until such time as an investigation can be completed. This provides for swift action while an investigation proceeds. RegTel currently has that power. The Bill requires ComReg to apply to the High Court in an emergency, something that is unnecessarily burdensome.

There is also a need to create a criminal sanction for breaching licence conditions as a deterrent to curb harmful practices. Various PRS providers have been prosecuted by the Data Protection Commissioner in the District Court and ComReg should be afforded similar powers. Again, the consumer is protected where the regulator has such powers.

There is a curious mention in the explanatory notes attached to the Bill on a number of amendments to the Communications Regulation Act 2002, relating to the carrying out of works on public roads to facilitate the laying of fibre optic cables. Nobody would object to the purpose involved. However, I have been in this House for many years, and I cannot ever recall sections of a Bill which relate to another Act being flagged on Second Stage as an intended bolt-on, without us having sight of those sections. It is a kind of virtual legislating which flies in the face of everything we do here. Second Stage is where these sections should be debated, not Committee Stage. It is not acceptable that we are to take on trust what should be a matter of public scrutiny and information. I want to express my opposition to what is shoddy work by the Minister. If these sections are not now in the Bill, then they should form part of a separate Bill. Second Stage is part and parcel of the legislative process, but this element is being introduced on Committee Stage and we cannot see it. That is a completely different situation from where amendments arise during the period between Second Stage and Committee Stage. I am uncomfortable with the issue, to put it mildly.

I hope that the Minister is open to amendments and at least takes on board the outline of the amendments I proposed. There is always a danger when the Opposition brings forward amendments and the Minister has all the power he wishes to slap them down. It would be in the interests of the Minister and in the regulation of premium rate services that we get this right. That means putting the consumer centre stage in this Bill, because it is ultimately all about the consumer, rather than RegTel, ComReg or people making money in an industry. This means we have to deal with issues such as refunds for consumers, and making sure the licensing regime still works in a very moving market where innovations come up all the time. ComReg may not be in a position to deal with such innovations if there is not an automatic presumption that a service must be licensed. None of us can keep up fully with what is going on in the telecommunications world because it is moving so rapidly. There also needs to be a regime for breaches in licences.

I am talking about practical amendments here. I am not talking about changing the spirit of the Bill, simply about improving it. If the Minister consults with his officials, I would be surprised if his advice is not to take on these particular points. They are to do with tweaking rather than altering the nature of the Bill. Considering the bank of knowledge that has been built up by the experience of RegTel, we will be doing a disservice if we do not use it to best effect. That means amending this Bill in small but very significant ways.

See this speech in context