Velti DR Limited

On 18 April the Tribunal adjudicated against a quiz competition service operated by the Level 2 provider Upright Line S.A. under the brand names Ustre, Oxyra and Ergma (the “Service”) (case reference 11099). The Service was promoted using affiliate marketing. There was evidence, from both consumers and internal monitoring, that some of the affiliate promotions for the Service were misleading.

The Level 1 provider for the Service was Velti D.R. Limited. During the course of the investigation against the Level 2 provider, the Executive had concerns regarding the Level 1 provider’s assessment of risk and the adequacy of the continuing steps taken to control risk in relation to the Service.
In addition the Executive had concerns regarding the method of exit from the Service and the timing of billing. As the Service operated using Payforit, the Level 1 provider was responsible for both the method of exit from the service and the timing of billing.
The Executive raised the following potential breach of the PhonepayPlus Code of Practice (12th Edition) (the "Code"):

• Rule 2.3.11- Method of exit
• Rule 2.3.2- Misleading
• Paragraph 3.1.3 – Risk assessment and control

The Tribunal upheld a breach of rule 2.3.2 and paragraph 3.1.3 of the Code. The Level 1 provider’s revenue in relation to the Service was within the range of Band 5 (£5,000- £50,000). The Tribunal considered the case to be significant and issued a formal reprimand, a fine of £17,500 and, to the extent that refunds have not already been satisfied by the Level 2 provider, a requirement that the Level 1 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. The Tribunal also issued a warning to the Level 1 provider, stating that Level 1 providers have an explicit obligation under the Code to make adequate enquiries in relation to how services are promoted. If a Level 1 provider does not make adequate enquires, it is likely to be found to have breached its risk assessment obligations.