The Level 2 provider, Global Billing Solutions operated an online subscription mobile content and competition quiz service using the brand name “Ringaling” (the “Service”). The Service operated on the premium rate shortcode 80160 at a cost of £4.50 per week and was promoted via affiliate marketing. The Level 1 provider for the Service was mBlox Limited.
The Service offered consumers the opportunity to access the Service’s mobile website and view daily feeds containing celebrity gossip, jokes, horoscopes and amusing videos. Consumers were also offered the opportunity to participate in a competition to win a prize, such as Apple products. The competition period was intended to end on 31 October 2013. The Service operated from September 2012 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. 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 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) (the "Code")
• 2.3.1 - Fair and equitable treatment
• 2.3.2 - Misleading
• 2.5.5 - Avoidance of harm (fear, anxiety, distress and/or offence)
• 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 Services was within the range of Band 4 (£50,000-£100,000). 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.