PhonepayPlus (PPP) has enforced a £100,000 fine and other sanctions against a scratch card competition service which had misleading links to a further subscription service. Omar Bucchioni explains what was wrong with the competition.
Topic: Misleading advertising
Who: PhonepayPlus and Mobile Interactive Group Ltd (MIG)
Where: United Kingdom
When: 9 July 2009
Law stated as at: 31 July 2009
Recently the PhonepayPlus (“PPP”), the regulatory body for all premium rate phone-paid services in the United Kingdom, investigated a new ‘Cash Attack’ scratch card competition which was offered by MIG in its capacity as the service provider.
This investigation was prompted after PPP received 95 complaints concerning the competition, which operated via a number of short codes. The scratch cards concerned were promoted in over 300 publications and prizes were offered to those whose scratch cards matched three symbols published by the competition promoter. The owners of scratch cards matching the three symbols concerned were then instructed to call a premium rate phone number, or text a keyword (printed on their scratch card) to one of the short codes used to operate the competition. Alternatively, a postal route was also provided for winners to claim their prize.
The problems arise when winners who tried to claim their prize by sending an SMS message to one of the advertised short codes were automatically entered into a “weekly competition” which was a subscription service called “Jackpot UK” costing £5 per week. Subscribers to this service are charged via their phone bills and pre-pay phone accounts. Given the number of complaints from individuals who became subscribers to this further service, PPP investigated the competition. Many complainants took issue with the fact that they had received unsolicited text messages from MIG and many were unaware that they had joined this subscription service before they then received their bills.
PPP found that the service contravened the PhonepayPlus Code of Practice and breached the following provisions: (a) Paragraph 5.4.1a – Fairness (Misleading); (b) Paragraph 5.7.2 – Pricing Information (Prominence); and Paragraph 7.6.6a – Competition (Inappropriate use of words such as ‘win’ or ‘prize’). The Tribunal upheld all of the above breaches of the Code of Practice and issued a Formal Reprimand and a £100,000 fine to MIG. In addition, the Tribunal imposed a bar on the service concerned and its associated promotion together with all other scratch card based services and promotions operated by MIG for a period of three months. Finally, the Tribunal also ordered that claims for refunds were to be paid by MIG so that the full amount spent by users would be returned, except where there was good cause to believe that any claims were not valid.
Why this matters:
This case serves as a reminder that where premium rate services are concerned with a competition, transparency is key so that consumers are not misled. Service Providers often receive the brunt of a PPP adjudication but the Information Providers behind the services in question must not become complacent – there have been proposals aired for PPP to regulate Information Providers more closely and this may happen in the near future.