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Adjudication

Publication Date
31 October 2013
Case Reference
28903
Procedure
Emergency Procedure
Adjudicated Party
Green Whale Holding Ltd
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 2.3.1 Fairness
Code 12 2.3.2 Misleading
Code 12 2.5.5 Avoidance of harm
Code 12 3.4.12 (a) Numbers
Code 12 2.2.2 Transparency and Pricing
Summary


The Level 2 provider, Greenwhale Holding Ltd, operated an online subscription mobile content and competition service, using the brand name “Brickoffers” (the “Service”). The Service operated on the premium rate shortcode 82070 at a cost of £4.50 per week and was promoted via affiliate marketers. The Level 1 provider for the Service was Globway B.V and Oxygen8 Communications Limited.
The Service offered consumers an opportunity to receive mobile downloads described as “funtones” and enter a prize draw to win an iPad. The Service operated from 19 June 2013 to 9 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 the PhonepayPlus Research and Market Intelligence Team (“RMIT”). 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 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) (the "Code"):

  • Rule 2.3.1 – Fair and equitable treatment
  • Rule 2.3.2 – Misleading
  • Rule 2.5.5 - Avoidance of harm (fear, anxiety, distress or offence)
  • Paragraph 3.4.12(a) – Registration of numbers
  • Rule 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 Service was within the range of Band 5 (£5000- £50,000). The Tribunal considered the case to be very serious and issued a formal reprimand, a fine of £27,000, 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. 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.


 

Click here to view the Adjudication decision