- Publication Date
- 22 August 2013
- Case Reference
- Emergency Procedure
- Adjudicated Party
- Jesta Digital GmbH
- Service Type
- Mobile download
- Tribunal's final assessment
- Very Serious
- Code 12 para 4.8.2d - Fine
Code 12 para 4.8.2i - General refunds
Code 12 para 4.8.2b - Formal reprimand and/or warning
- Breaches raised
The Level 2 provider, Jesta Digital GmbH, trading as “Jamster” operated an online subscription content download service using the brand names “Jamster Action Club” and “The Tone Club”. The Service operated on the premium rate shortcode 88888 and via Payforit, and cost £4.50 per week. The Level 1 provider for the Service was Velti DR Limited.
The Service offered consumers the opportunity to download unlimited mobile content such as ringtones, games and wallpapers. The PFI service operated from 3 June 2013 to 2 July 2013 (when it was suspended as a result of the use of the Emergency procedure).
Serious concerns regarding the promotion of the Service were uncovered as a result of in-house monitoring of the Service conducted by PhonepayPlus Research and Market Intelligence Team. The monitoring revealed that affiliate marketing, which generated consumer traffic to the Service, appeared to utilise a form of malware (ransomware) that stopped consumers’ internet browsers working, resulting in users’ being unable to access a large number of popular websites, including Facebook, Ebay, Google. Users were told that they were required to sign up to the Service (and/or other premium rate services) in order to unblock their browsers.
The Executive raised the following potential breaches of the PhonepayPlus Code of Practice (12th Edition)
• 2.3.1 - Fair and equitable treatment
• 2.3.2 - Misleading
• 2.5.5 - Avoidance of harm (fear, anxiety, distress or offence)
• 2.2.2 - Written information material to the decision to purchase
The Tribunal upheld all the breaches raised. The Level 2 provider’s revenue in relation to the Services was within the range of Band 5 (£5,000-£50,000). The Tribunal considered the case to be very serious and issued a formal reprimand, a fine of £25,000, a warning that if the Level 2 provider fails to ensure that it has sufficient measures in place to prevent actual or potential consumer harm being caused by affiliate marketing in future it should expect to receive a significant penalty for any similar breach 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.