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Lordas Limited

Publication Date
12 December 2013
Case Reference
19673
Procedure
Track 2
Adjudicated Party
Lordas Limited
Service Type
Competition - non-scratchcard
Tribunal's final assessment
Very Serious
Sanctions
Code 12 para 4.8.2b - Formal reprimand and/or warning
Code 12 para 4.8.2d - Fine
Code 12 para 4.8.2i - General refunds
Breaches raised
Code 12 2.3.2 Misleading
Code 12 3.1.7 General responsibilities
Summary

Between 11 March 2013 and 1 November 2013, PhonepayPlus received 71 complaints from consumers in relation to a subscription competition service, which operated under the brand name “Nekoj” (the “Service”), and was operated by the Level 2 provider Lordas Limited. The Service operated on a number of premium rate shortcodes including, 64055 and 79910, and via Payforit. Consumers were charged £10 every three days. The Level 1 provider was Velti DR Limited. The Service operated between December 2012 and 16 May 2013, when it was voluntarily suspended by the Level 1 provider following correspondence with PhonepayPlus. The Service was promoted online by affiliate marketers.

Consumers who subscribed to the Service were sent ten trivia questions every three days. The consumers with the highest score each week were entered into a monthly draw to win a prize. Advertised prizes included Apple products and Amazon vouchers.

Some complainants stated that they had been misled into entering the Service and as a result had inadvertently incurred premium rate charges. In addition, some complainants stated that they had not interacted with the Service but had incurred unsolicited charges. There were a significant number of complaints made on behalf of young people who had incurred large bills. In addition, PhonepayPlus conducted monitoring of the Service, which resulted in concerns regarding the technical quality of the Service.

The Executive raised the following potential breaches of the PhonepayPlus Code of Practice (12th Edition) (the "Code"):

  • Rule 2.3.2 – Misleading
  • Paragraph 3.1.7 – Adequate technical quality

The Tribunal upheld all the breaches of the Code raised. The Level 2 provider’s revenue in relation to the Service was within the range of Band 3 (£100,000 - £250,000). The Tribunal considered the case to be very serious and issued a formal reprimand, a fine of £65,000 and 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 that such claims are not valid, and provide evidence to PhonepayPlus that such refunds have been made.