Purely Creative Limited

Between 11 October 2012 and 17 June 2014, PhonepayPlus received 76 complaints from consumers in relation to a scratchcard prize draw service, (the “Service”) operated by the Level 2 provider Purely Creative Limited (the “Level 2 provider”) on the premium rate shortcodes 84228, 88222, 88810 and various premium rate 09 numbers. The Service was promoted by scratchcards that were inserted into various national publications, each insert contained a strip of three scratchcards; one scratchcard contained three matching symbols, another contained two matching symbols and another had no matching symbols. Consumers were invited to ascertain whether their scratchcard contained winning symbols by sending a keyword to a shortcode (in response consumers received six messages costing £1.50 per message) or calling a premium rate number (at a cost of £1.53 per minute from a BT Landline (with a minimum five minutes and 40 seconds charge) or writing to the Level 2 provider (a free route of entry). The Level 2 provider commenced operation of various competition services in 1986 but the exact date the Service commenced scratchcard promotions was unknown. The Service is currently operational.

Generally complainants stated that they had received unsolicited charges or they acknowledged interacting with the Service but stated it was misleading and/or the pricing information was not clear. A significant number of complaints were made on behalf of young people or otherwise vulnerable consumers.

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

• Rule 2.3.2 – Misleading
• Rule 2.4.1 – Privacy
• Rule 2.1.1 – Legality

The Tribunal upheld the breaches of rule 2.3.2 and rule 2.1.1 of the Code. The Level 2 provider’s revenue in relation to the Service was within the range of Band 1 (£1,000,000+). The Tribunal considered the case to be significant and imposed a requirement that the Level 2 provider remedy the breach of rule 2.3.2 of the Code for all future promotions, a formal reprimand, a fine of £25,000, 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: 78% Investigation costs and 100% Tribunal costs  (the Tribunal determined that as a breach of the Code had not been upheld, it was appropriate to recommend a reduction in the administrative costs).