Wednesday, 16 February 2005
Dáil Eireann Debate
Dr. Upton: I thank the Ceann Comhairle for allowing me to raise this matter, especially since I had to do a little toing and froing to find a home for this debate. It is often difficult to assign departmental responsibility to matters relating to children. While the Minister of State with responsibility for children is attached to the Department of Health and Children, matters affecting children cross over many Departments.
I refer to the problem of young people and children inadvertently agreeing to contracts for services with ringtone providers. I hope the Minister for Enterprise, Trade and Employment can clarify what obligations rest with such service providers to ensure subscribers are aware of age restrictions. I received a complaint from a constituent whose son, aged ten, received a new Nokia polyphonic mobile phone for Christmas with €60 free credit. Like many young people, this boy was attracted by a glossy advertisement in a football magazine to the services of Jamster, a provider of ringtones, mobile phone wallpaper and games. The ten year old was able to join one of the Jamster clubs, thereby agreeing to a contract with the provider. This club entitles a subscriber to a number of new ringtones and wallpaper per month. The boy was not aware as he joined the club that he was agreeing to a contract. He was not asked his age nor did the company stipulate that a subscriber must be at least 16 years.
One can download the contract agreed by subscribers at www.jamster.ie. This outlines that a contract agreed with a person under 16 is void. This is the current statement of the legal position. However, the ringtone provider should also inform all potential subscribers that they must be at least 16 to agree to a contract. I joined the same Jamster club over the Internet and at no stage was I asked to confirm that I was over 16 or informed that I was agreeing to a contract.
Jamster is owned by the iLove company based in Berlin, Germany. The company provides different mobile phone accessory services aimed at different customers. Jamster is aimed at children and the latest pop songs are offered as ringtones, as well as the well known “Crazy Frog” ringtone. Jamster offers colour cartoon wallpaper and games and its services are marketed to children. Advertisements are placed in magazines heavily bought by children and teenagers. Jamster earns a great deal of its revenue from illegal contracts with children and young people who are completely unaware they have agreed to them.
The subscriber pays a fee on joining a Jamster club. This is €8 per month, for example, for the polyphonic ringtone club or the super games club. This allows the subscriber to one free ringtone and an entitlement to download further ringtones. However, a subscriber pays more than €8 to avail of the club. A sum of €1.65 is charged for every text alert received. This charge is levied when the subscriber uploads the GPRS connection on a text alert received. My constituent’s son spent most of his €60 free credit on uploading such text alerts, which comprised new ringtones. A subscriber is sent text alerts on ordering a new ringtone and he or she can also receive unsolicited messages.
I contacted Jamster at the 1890 number provided but its representative was unwilling to provide clarification on its pricing structure. I was referred to the mobile phone provider, Vodafone, which I contacted, but it was unable to offer assistance. The corporate blurb on Jamster’s website boasts of its ability to reap financial rewards from its customer base and of the free ringtone offer as a great teaser to derive response. It also boasts of what it calls high conversion and high payouts, listed as €2 for every sale.
I would be grateful if the Minister and relevant State agencies would look into the pricing structure of this service. This company is preying on the attraction of young people and children to their mobile phones, especially their ringtones, logos and games.
Jamster is aimed at young people. It induces young people to sign subscription contracts without letting them know that they must be 16 or that they are even signing a contract. The pricing policy is unclear, but from the information I have it appears to be exploitative. I urge the Minister to bring in guidelines to protect children and young people availing of the new mobile phone technology. It is often the case that parents are not aware of the cost of such contracts and downloads.
Minister for Enterprise, Trade and Employment (Mr. Martin): I thank the Deputy for raising this issue. Her contribution and complaint have enlightened me and the House about the nature of the case. A number of Departments wondered which Department should take up this concern. Eventually we looked at it under the issue of company law and have drawn up the following reply. I ask the Deputy to discuss the issue further with my officials in terms of the details she has ascertained.
The Deputy refers to a telecommunications service whereby mobile phone customers can purchase and download ringtones for their handset. She is concerned, and rightly so if it is true, about the high incidence of children using this service and paying high prices for the product in question. This is not a matter about which I had knowledge prior to today and my officials have had a limited amount of time to research the matter.
I understand that the service works as follows. The customer makes a call or a series of calls on his or her mobile phone as a result of which a website address is sent by text message to the phone. The customer can then download the ringtone required from the website in question and load it on to his or her mobile phone handset. Payment for this service is levied by means of a charge on the customer’s mobile phone bill or, in the case of pre-paid customers, by a deduction from their available call credit.
One of the Deputy’s concerns is that at no point in the transaction is any indication given of the price which will be charged for downloading the ringtone. There is at least one company providing this service and I expect that there may be others. It appears, on the basis of the research conducted by my officials this afternoon, that this is a matter which raises a number of complex legal issues that merit further investigation. The Deputy will appreciate that I may not be able to give definitive answers to some of her questions this evening. However, I would be pleased to receive whatever detailed information the Deputy might have on the matter that might assist my Department in its inquiries. If the Deputy has such information or if I have misunderstood her concerns on this matter in any way, she should communicate directly with my office.
My Department is responsible, through the Director of Consumer Affairs, for the administration and enforcement of the distance selling directive, which is basically an EU law governing what are called distance contracts or contracts concluded, for example, by telephone, over the Internet or by mail order. In the case of such contracts there are legal obligations on the supplier of the product or service in question to indicate to the purchaser in advance the terms and conditions, including in particular the price applying to the purchase. In certain circumstances, there are also provisions for what is known as a cooling-off period, whereby customers may cancel the contract without penalty if they change their mind. At this point I cannot say whether the type of service to which the Deputy refers constitutes a distance contract within the meaning of this directive. I will, however, make further inquiries to establish the precise position. These inquiries may involve seeking legal advice in the matter.
My Department has participated in negotiations in Brussels on a new unfair commercial practices directive, which is currently before the European Parliament and has not yet been adopted by the European Council of Ministers. The draft directive, which will in due course be an important addition to our body of consumer law, purports to outlaw a wide range of activities which are regarded as constituting unfair, misleading or aggressive sales practices. I have also asked my officials to examine the terms of this draft directive to ascertain whether the practice of concern to the Deputy is comprehended by its terms.
There may also be a possibility that the service in question is a premium rate telecommunications service. While this is not a matter for me or my Department, I am advised that such services are the subject of a code of practice administered by Regtel, an independent, not-for-profit limited company which is financed by means of a levy on the telecommunications industry. Regtel operates through a strict code of practice which must be observed by all companies or individuals offering premium rate services in Ireland. Again, however, I will have to make further inquiries to establish if Regtel has any function in this matter. I will also raise the matter with my colleague, the Minister for Communications, Marine and Natural Resources, to establish if any responsibility arises under his remit.
This matter appears to raise issues of contract law and perhaps even common law in so far as it might apply to the conclusion of contracts involving minors. I confirm again that I have asked my officials to make further inquiries and I will certainly communicate with the Deputy in the matter at an early date. No doubt we can facilitate an exchange of information between the Deputy and my officials.
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