Mobile Content Firm Fined And Banned From Service

The UK arm of the mobile content provider, LaNetro Zed has been fined US$44,000 by the UK's premium rate telephony regulator, ICSTIS and also had access to its premium rate SMS services barred for three months. The company is appealing the fine and ban, and while the appeal is being held, the company will be permitted to continue offering service.

The main complaints were based around the company failing to accept the industry standard "stop" command to stop charging customers for subscription services. A total of 60 people had complained to the regulator about this. Zed had claimed that the universal "stop" command had been proven to be 100% effective. They acknowledged, however, that they do attempt to collect funds due after the "stop" command has been received.

As complainants reported that they had continued to receive chargeable messages despite sending the "stop" command, it appeared that the service provider had taken unfair advantage of them. In addition, the service provider's website was found to contain a statement explaining that interest would be charged on any overdue payments. This also appeared to take unfair advantage of consumers because they would not be aware of this clause before subscribing to the service.

Zed explained that it was possible for users to maintain a week's worth of access to content and services without having sufficient credit on their accounts to allow the service provider to collect the weekly subscription cost. As a result, they believed they were justified in sending further chargeable messages after the "stop" command had been received in order to collect money for services previously provided. With regard to the overdue payments statement on their website, they explained that they were fully entitled to charge reasonable interest on sums owed. They added, however, that they had never applied this policy.

The regulator issued the fine and a formal reprimand. It also ordered Zed to offer refunds to all the complainants. In addition, access to the service was barred for three months. The consumer helpline number was also barred for three months or until it could be shown to comply with the regulator premium rate code.

Zed UK subsequently requested a review and this request has been granted. The sanctions imposed in the case have been suspended pending the outcome of the review."

Posted to the site on 27th February 2006