Cellcast UK Ltd

Between 28 February 2012 and 23 July 2013, PhonepayPlus received 22 complaints from consumers, in relation to an glamour/ adult picture and virtual chat service (the “Service”). The Service is operated by the Level 2 provider Cellcast UK Limited on a number of premium rate shortcodes including 69222, 69444, 69633 and 80090. The Level 1 provider is Velti DR Limited. The Service commenced operation on 21 November 2011 and is currently operational.

The Service is currently advertised using on-screen promotions on various television channels. Consumers enter the Service by sending a keyword to one of the Service shortcodes. Consumers are charged £3 per picture received via two messages charged at £1.50 each. Where a keyword is not recognised, the Service automatically switches consumers to the virtual chat element of the Service. For the virtual chat element of the Service, consumers are charged £1.50 per text chat message received from an operator.

The majority of complaints were from family members regarding under 18 year olds interacting with the Service and accessing inappropriate adult content. In addition, many complainants reported bill shock. The maximum cost incurred by a complainant was £3,029.47 over the course of one week.

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

• • 2.2.5 – Pricing prominence and proximity
• • 2.2.6 – Provision of free messages
• • 2.3.12(c) – Spend reminder messages
• • 2.3.2 – Misleading

The Tribunal upheld three breaches of the Code. The alleged breach of rule 2.3.2 was not upheld. The Level 2 provider’s revenue in relation to the Service was within the range of Band 1 (£500,000+). The Tribunal considered the case to be serious and issued a formal reprimand, a fine of £100,000, a requirement that the Level 2 provider seeks compliance advice for all current virtual chat and/or picture sender services within two weeks of the date of publication of this decision and thereafter implement the advice within two weeks 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.