£200,000 fine for company that charged consumers without consent
11 July 2019
The Phone-paid Services Authority (PSA) has issued a £200,000 fine to a company which was found to have misled consumers and charged them for access to the ‘Applicateka’ multimedia platform without their consent.
Net Real Solutions, based in Spain, offered consumers access to digital content, including games, videos, apps and mobile phone wallpapers on a subscription basis, charging £4.50 a week.
However, the PSA Tribunal found evidence that consumers had been misled into signing up for the service or were signed up without their consent.
The service had been promoted online via affiliate marketing partners. According to the company which provided their payment platform, over 33,000 consumers were found to have been signed up using malware. This worked by simulating the process of signing up to be billed via pop-up adverts on YouTube.
The PSA received 718 complaints about the service in total. Consumers reported having no knowledge of signing up to the service. One consumer said:
‘I have not signed up for this service or any other service and don’t even know what I am supposed to be getting but have been charged £4.50 a week for the past three months.’
The PSA Tribunal found that Net Real Solutions had failed to secure consumer’s consent to be charged, and had misled consumers, in breach of the PSA Code of Practice for industry.
The company has been issued with a fine of £200,000. The PSA Tribunal stated that it had significantly reduced the fine that it otherwise would have imposed, as the service provider had received very little of the revenue as a result of the consent to charge breach, much of which was instead refunded to consumers by the payment platform provider. Net Real Solutions also voluntarily issued refunds to consumers who were misled into subscribing by content locking.
Access to the service has been barred for two months, and all material to be promoted via affiliate marketing will need to be submitted to the PSA for compliance advice for the next two years.
A General Refunds order has also been issued, meaning that all eligible consumers who request a refund must receive one.
For more information see the adjudication minutes.