Between 24 April 2012 and 1 June 2013, PhonepayPlus received 34 complaints from consumers in relation to a subscription competition and mobile content service, which operated under the brand name “Pikabooo” (the “Service”), and was operated by the Level 2 provider A&M Lead Factory B.V. The Service operated on the premium rate shortcodes 61827 and 65013 and cost £4.50 per week (3 x £1.50 per message). The Level 2 provider was contracted with the Level 1 provider i-pay24. In addition, there were two other Level 1 providers, Mob Invest and mBlox Limited. The Service was promoted online using affiliate marketing. The Service operated between 21 March 2012 and June 2013, when it was voluntarily suspended by the Level 1 and Level 2 providers following correspondence with PhonepayPlus.
The Service offered consumers the opportunity to enter a prize draw every three months to win a prize, such as an iPad, iPhone or shopping vouchers. Subscribers could also download mobile content (three wallpapers) every week.
The majority of complainants stated that they had not understood they would be charged and did not recall entering the Service. In addition, some complainants experienced bill shock. The maximum cost incurred by a complainant was £270.00 over approximately one year.
The Executive raised the following potential breaches of the PhonepayPlus Code of Practice (12th Edition) (the "Code"):
- Rule 2.3.2 – Misleading
- Rule 2.3.12(d) - Subscription reminder messages
The Tribunal upheld a breach of rule 2.3.2 of the Code. The Level 2 provider’s revenue in relation to the Service was within the range of Band 4 (£50,000-£100,000). The Tribunal considered the case to be serious and issued a formal reprimand, a fine of £10,000 and a requirement that the Level 2 provider 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 that such claims are not valid, and provide evidence to PhonepayPlus that such refunds have been made.