The Level 2 provider, Bafona Ltd operated an online subscription competition quiz service, “Zovut”. The Service was operated using Payforit at a cost of £4.50 per week and was promoted via affiliate marketing. The Level 1 providers for the Service were txtNation Limited and OpenMarket Limited.
The Service offered consumers the opportunity to participate in weekly quiz competitions. Consumers who answered the most questions correctly in the shortest time period won a prize (prizes were awarded on a monthly basis, such as, an X-Box 360).
The Service operated from 12 June 2013 to 2 July 2013 (when it was suspended as a result of the use of the Emergency procedure).
PhonepayPlus received no complaints from consumers. Concerns regarding the promotion of the Service were uncovered as a result of in-house monitoring conducted by the 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 that stopped users’ internet browsers working, and resulted in users being unable to access a large number of popular websites, including, Facebook, Ebay and 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):
• 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 services
The Tribunal upheld all the breaches raised. The Level 2 provider’s revenue in relation to the Service was within the range of Band 6 (£1 - £5,000). 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 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.