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Adjudication

Publication Date
22 August 2013
Case Reference
28785
Procedure
Emergency Procedure
Adjudicated Party
GICO (Europe) LLP
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
Summary

The Level 2 provider, GICO (Europe) LLP, operated an online subscription competition quiz service using the brand name “Triviato”. The Service was operated on the premium rate shortcode 80876 at a cost £4.50 per week. The Level 1 providers for the Service were MC Mobile Connectivity GmbH and Velti DR Limited. The Service offered consumers the opportunity to participate in monthly quiz competitions. Consumers were required to answer ten questions. The person who answered the most questions in the fastest time every month won a prize, such as a Shell giftcard. The Service operated from September 2012 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 the PhonepayPlus Research and Market Intelligence Team. The monitoring revealed that affiliate marketing promotions, which generated consumer traffic to the Service, appeared to utilise a form of malware (ransomware) that stopped consumers’ internet browsers from 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) (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)
• Rule 2.2.5 – Pricing prominence
• Rule 2.2.2 - Written information material to the decision to purchase
• Paragraph 3.4.1 – Registration of organisation
• Paragraph 3.4.12(a) – Registration of numbers

The Tribunal upheld all breaches raised save for the alleged breach of paragraph 3.4.12(a). 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 £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 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.

Click here to view the Adjudication decision