Cloudspace Limited

Between 21 November 2014 and 17 November 2015, the Executive received 60 complaints concerning a glamour video subscription service, charged at £3 per week, operating on shared shortcodes 89225, 85222, 89333, 66144 and 88150 (the “Service”). The Service was operated by the Level 2 provider Cloudspace Limited (the “Level 2 provider”) from January 2014. The Level 1 provider for Service shortcodes 85222 and 89333 was IMImobile Europe Limited (and subsequently Wireless Information Network Limited). The Level 1 provider for Service shortcodes 89225, 88150 and 66144 was Veoo Ltd. 

Complainants variously alleged that the Service charges were unsolicited. In addition, after analysing complainant message logs, the Executive noted that there was a high failure rate of chargeable messages following the purported consumer opt-ins, and the delivery status of Service messages was unclear.

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

• Paragraph 4.2.4 – Provision of false information to PhonepayPlus
• Rule 2.3.3 – Consent to charge

The Tribunal upheld all breaches of the Code raised. The Level 2 provider’s revenue in relation to the Service was in Band 3 (£250,000 - £499,999). The Tribunal considered the case to be very serious and imposed a formal reprimand, a fine of £200,000, and a requirement to remedy the breach of being unable to provide evidence which established consumer consent to be charged. Within one month of the date of publication of this decision the Level 2 provider is to provide PhonepayPlus with current and satisfactory evidence of consumer consent to charge in relation to all of its services in line with the requirements of the Code and published Guidance. Such evidence is to include evidence of the systems in place to obtain evidence of consent, and the evidence of consent obtained for each consumer who had opted in to its services in the period from 25 February 2016 to 3 March 2016. The Tribunal also imposed 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%