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Adjudication

Publication Date
16 October 2013
Case Reference
10467
Procedure
Track 2
Adjudicated Party
Mypengo Mobile B.V.
Service Type
Competition - non-scratchcard
Tribunal's final assessment
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 2.2.5 Rules relating to pricing
Code 12 2.3.1 Fairness
Summary


Between 1 May 2012 and 12 August 2013, PhonepayPlus received 256 complaints from consumers in relation to a subscription (Sonxxie) and a non-subscription (Prize Rally) competition service (the “Services”) operated by the Level 2 provider Mypengo Mobile B.V. on the shortcodes 85150, 88688 and 80876. The Level 1 providers for the Services were OpenMarket Limited and Velti DR Limited. Prize Rally began operation in March 2012 and was voluntarily suspended by the Level 2 provider in June 2013. The Sonxxie service began operation in March 2013 and promotions for the service were voluntarily suspended by the Level 2 provider on 10 June 2013.

The Services offered consumers the opportunity to answer trivia questions. Each correct answer provided an entry into a monthly competition draw to win prizes such as an iPad mini or an iPhone 5. The Prize Rally service charged consumers a £4.50 sign-up fee, £3.00 per question answered (£1.50 to receive a question and £1.50 to answer a question) and a £1.50 reminder message 24 hours after a consumer stopped interacting with the service. The Sonxxie service cost £4.50 per week. The Services were promoted using affiliate marketing. The majority of complainants stated that they had not understood that they would be charged and reported viewing misleading promotional material. In addition, some complainants stated they received unsolicited promotional messages and had not requested or engaged with the Services.

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

• Rule 2.3.2 – Misleading
• Rule 2.2.5 – Pricing prominence and proximity
• Rule 2.3.1 – Fair and equitable treatment
The Tribunal upheld all the breaches raised. The Level 2 provider’s revenue in relation to the Service was within the range of Band 1 (£500,000+). The Tribunal considered the case to be serious and issued a formal reprimand, a fine of £100,000, 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 Services, 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. The Tribunal also warned the Level 2 provider that it had noted that senior personnel connected to the Level 2 provider had been involved in three recent adjudications, as a result, any future non-compliance, especially if it is of a similar nature, may result in significant consequences.

Click here to view the Adjudication decision