Telecom2

The Phone-Paid Services Authority (‘PSA’) opened an investigation into Telecom2 Limited (‘Telecom2’) in August 2021.

The investigation into Telecom2 concerned the adequacy of its due diligence, risk assessment and control (“DDRAC”) measures over a 7-year period. The period commenced when the 14th Edition of the Code of practice (“Code 14”) was in force and continued for some time after Code 15 came into force. During the investigation a second breach was raised due to Telecom2’s failure to fully respond to a direction from the PSA.

The parties agreed that as the case severity overall is very serious the following sanctions should be imposed:

• formal reprimand 
• a total fine of £255,000 comprised of the following amounts for each breach: Breach 1 (Risk assessment and Control pursuant to paragraph 3.1.3 (a) and (b) of Code 14 and paragraph 3.9.2 of Code 15) £180,000. Breach 2 (failing to provide information pursuant to 4.2.2. of Code 14) £75,000. 
• a compliance audit to be carried out by a third party approved by the PSA and to a standard prescribed by the PSA, the costs of such audit to be paid by the Relevant Party. The audit must be completed and the recommendations implemented within 12 months. Telecom2 agrees not to resume its ICSS services until completion of the audit.
• Telecom2 to pay the final administration fee £13,977.50 in full. 

Telecom2 consent order signed