Summary

  • 17 adjudications
  • £1.4m total fines
  • 250k maximum fine
  • 20k minimum fine
  • 116k average fine
  • 71% adjudications classified as “very serious”

Key themes this quarter

The number of adjudications has increased to 17, compared with 11 in the previous quarter. Fines were imposed in 12 adjudications, with the remaining five resulting in bans for the providers concerned ranging from three to fives years.

The maximum fine was £250,000, down from £300,000 in the previous quarter. However, the average fine across the 12 cases in which fines were imposed was £116,000 – a substantial increase from £78,000 in the previous quarter.

All five of the adjudications in which bans were imposed involved failure to comply with previous sanctions. Clarity of pricing information remains a persistent issue for providers.

Forward view

PhonepayPlus has published its Business Plan and Budget 2014/15, “Adding Value in a Complex and Converging Market”, setting out how it aims to deliver effective and forward-looking regulation in a rapidly changing market characterised by an increasing volume and complexity of complaints. The key themes and priorities are strengthening compliance and enforcement, improving the customer experience, future-proofing regulation, and enhancing regulatory efficiency and effectiveness.

Stakeholders will be consulted in July about the proposed changes to the Code and associated procedures.

Most prevalent breaches found in this quarter

Rule 2.2.5 – Pricing prominence

  • Pricing information not sufficiently proximate to the “call to action” eg positioned on part of a webpage that the consumer would not ordinarily navigate to or in too small a font.
  • Repeated use of the word “free” and not enough attention drawn to the fact that the service itself was not free.

Rule 2.3.1 – Fair and equitable treatment

  • Automatically diverting customers to affiliate marketing promotions for competition subscription services without their knowledge.

Rule 2.3.2 – Misleading

  • Consumers misled into believing they were completing a survey for a trusted brand in return for being entered into a prize draw, when in fact to enter the draw they would be required to enter into a premium rate subscription service.
  • Fictitious incentives contained in affiliate marketing promotions and a countdown clock on web pages creating a false sense of urgency.

Rule 2.3.3 – Charging without consent

  • Providers being unable to produce evidence of consent to charge having been given.
  • Providers should be able to provide full logs containing messages sent from consumers’ handsets, or if some other form of opt-in used, equally robust verifiable consent to charge.