| Summary |
This case was brought against the Level 2 provider under Paragraph 4.5 of the 14th Edition of the Code of Practice.
The case concerned a voucher subscription service called “Voucher Bonanza”, which operated on a pin opt-in flow using shortcode 60444 (“the Service”). The Level 2 provider for the Service was Entertainmob Kommunikation UG (the “Level 2 provider”). The Service was charged at £4.50 per month to receive monthly discount voucher codes and sale notifications, for leading brands and retailers via text message (SMS) to a mobile phone. The Service was registered with the PSA on 17 January 2018.
The Level 1 provider in respect of the Service was Dynamic Mobile Billing Ltd (the “Level 1 provider”).
The Level 1 and Level 2 providers both stated that the value chain consisted of a third party named Kalastia Consulting Limited (the “Supplier”). The Supplier had referred to itself as the “Sub-L1”. The PSA’s Code of Practice does not recognise “Sub-L1s”. As at the date of this adjudication, the Executive is of the view that the Supplier is not a Level 1 provider for the Service and does not fall within the remit of the Code.
The Level 2 provider stated that the Service commenced operation on 23 January 2018. It also advised that the Service was promoted through co-registration promotion offers for shopping vouchers between 23 January 2018 and 1 December 2018 and would not be promoted again in the future. The Level 2 provider also supplied the following information on the Service, namely that consumers opted in by inputting their mobile MSISDN into a confirmation box within a promotion. Following this, they received a PIN to their mobile MSISDN which they were required to enter into a second box to verify their entry into the subscription. From that point on, consumers received discount voucher codes straight to their mobile MSISDN within a monthly SMS.
At the beginning of the investigation, the Level 2 provider advised that the Service was dormant (obtaining no new subscribers but still billing existing subscribers). Subsequently, the Service was described by other parties in the value chain as being disconnected (gaining no new subscribers and no longer billing existing subscribers). The Level 1 provider informed the PSA that a request was made to cancel the shortcode on 7 July 2019. The Service was terminated on 8 August 2019.
The PSA received its first complaint about the Service on 24 January 2018. At the time of this investigation, the UK had not yet left the EU and the Communications Act (e-Commerce) EU Exit) Regulations 2020 were not in force. Because the Level 2 provider was based in Germany, the PSA needed to take additional steps before it could take any measures against it. Accordingly, on 26 July 2018 the Executive informed the Level 2 provider of its intention to send a formal referral to Germany. The Executive duly sent an e-Commerce referral to Germany. On 30 August 2018, the German authority confirmed that it did not intend to take its own measures against the Level 2 provider. The Executive therefore took derogation as of 30 August 2018 and informed the Level 2 provider of its intention to take its own measures in accordance with Article 3(4)(b) of Directive 2000/31/EC.
The Executive received a total of 132 complaints about the Service, of which 109 of these complaints were received after obtaining derogation on 30 August 2018. The main complaint period was between September 2018 and December 2018. The complainants variously alleged that they did not sign up to nor agree to be charged by the Level 2 provider and were unaware of the Service or what they were being charged for.
Final overall assessment
Having regard to all the circumstances of the case, the Tribunal decided to impose the following sanctions:
- a formal reprimand
- a prohibition on the Level 2 provider from providing, or having any involvement in, any premium rate service for a period of five years, starting from the date of publication of the Tribunal decision
- a requirement that the Level 2 provider must refund all consumers who claim a refund for the full amount spent by them on the Service, within 28 days of their claim, save where there is good cause to believe such claims are not valid, and provide evidence to the PSA that such refunds have been made
- a fine of £750,000 broken down as follows:
Rule 2.3.2 - £250,000
Rule 2.3.3 - £250,000
Paragraph 4.2.3 - £250,000.
Administrative charge recommendation: 100% |
