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Adjudication

Publication Date
01 October 2015
Case Reference
56005
Procedure
Track 2
Adjudicated Party
Rhydel Ltd
Service Type
Video
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
Code 12 2.3.3 Fairness
Code 12 4.2.4 Investigations
Code 12 2.3.12 (d) i Fairness
Code 12 2.3.12 (d) ii Fairness
Code 12 2.3.12 (d) iii Fairness
Code 12 2.3.12 (d) iv Fairness
Code 12 2.3.12 (d) v Fairness
Code 12 2.3.12 (d) vi Fairness
Summary

Between 5 November 2014 and 22 July 2015, PhonepayPlus received 143 complaints from consumers in relation to a glamour video subscription service called NewBabes (the “Service”), which operated on the dedicated shortcode 78018 and on the shared shortcodes 82999 and 88150 at a cost of £3 per week. The Level 2 provider for the Service was Rhydel Ltd (the “Level 2 provider”) and the Level 1 providers were Zamano Solutions Limited with respect to shortcode 78018 and Veoo Ltd with respect to shortcodes 82999 and 88150.  The Service commenced operation (i) on 23 September 2014 on shortcode 78018; (ii) on 1 November 2014 on shortcode 88150; and (iii) on 11 February 2015 on shortcode 82999. The Service continues to operate on shortcodes 82999 and 88150 but the Service was voluntarily suspended by Zamano Solutions Limited on 10 September 2015, following correspondence with PhonepayPlus.

Complainants variously alleged that the Service charges they incurred were unsolicited and/or that the STOP command failed to cease the Service. In addition, after analysing complainant message logs, the Executive noted that there was a high failure rate of chargeable Service messages following the purported consumer opt-ins and the delivery status for Service messages was unclear.

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

  • Rule 2.3.3 – Consent to Charge
  • Rule 4.2.4 – Provision of false/misleading information to PhonepayPlus
  • Rule 2.3.12 – Subscription Spend Reminders

The Tribunal upheld all the breaches of the Code raised.  The Level 2 provider’s revenue in relation to the Service was Band 3 (£250,000-£499,999). The Tribunal considered the case to be very serious and imposed a formal reprimand, a fine of £120,000 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. 

Administrative charge recommendation:                                                                                     100%

Click here to view the Adjudication decision