Between 2 October 2012 and 26 June 2013, PhonepayPlus received 42 complaints from consumers, in relation to a subscription competition service, which operated under the brand name “Funfone” (the “Service”), and was operated by the Level 2 provider Immediato B.V. on the premium rate shortcode 88999. The Level 1 provider was Echovox SA. The Service operated between 14 February 2012 and 30 May 2013 (when it was voluntarily suspended by the Level 2 provider following correspondence with PhonepayPlus).
Consumers subscribed to the Service using mobile originating (“MO”) opt-in, and were entered into a draw to win a prize, such as an iPad. Consumers were also given access to the Level 2 provider’s second service, “RINGTONE”. Consumers received weekly credits which could be redeemed for mobile content on the “RINGTONE” service website. Consumers were charged £4.50 per week for the Service. The Service was promoted online using affiliate marketing.
The majority of complainants stated the SMS messages they received were unsolicited and they had not engaged with the Service. In addition, some complainants acknowledged entering the Service but stated they had not understood that they would be charged.
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 2.2.2 – 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 3 (£100,000-£250,000). The Tribunal considered the case to be serious and issued a formal reprimand, a fine of £40,000 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 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.