Premium Rate Phone Company Hit With Record Fine

Published on: 11th Oct 2012

­A UK firm has been hit with a record £800,000 fine after being foung guilty of breaking regulations applying to premium rate telephone services.

The premium rate services regulator, PhonepayPlus took action against the premium rate line competitions run by Churchcastle, which were widely advertised in newspapers and magazines nationwide.

These competitions were followed up by misleading direct mail marketing that encouraged consumers, many of whom were elderly, to continue to engage with the premium rate service, often at considerable expense.

Word search competitions were carried by around 50 publications across the UK, including a number of major national newspapers. Once a consumer had entered the competition and provided contact details, they received a variety of direct mail marketing that encouraged them to continue to engage with the competition. Some consumers received up to four promotions a week. The marketing was highly personalised and included letters designed to look hand-written. For example, Easter cards gave the impression that the consumer was part of a select group of participants and they were very close to winning. Prizes, such as low-quality jewelry described as 'strictly limited' and 'rare', were also offered. The cost of calling the premium rate numbers was either unclear or not prominently placed in these direct mail promotions.

In many cases, PhonepayPlus was alerted to the consumer harm by relatives or carers who discovered that their loved ones had unexpectedly high phone bills.

PhonepayPlus received a number of complaints regarding elderly Churchcastle customers who were very shocked, and some distressed, about the costs that they had incurred. Some of these vulnerable consumers ran up £100's worth of phone bills.

Paul Whiteing, Chief Executive of PhonepayPlus said: "We are saddened that elderly consumers have been misled in this cynical way. PhonepayPlus will not tolerate any misleading activity that takes advantage of vulnerable people and we encourage anybody who is concerned about an elderly relative's use of premium rate services to contact us or check our website,"

 

Tags: [phonepayplus]  [UK]