Out-Law News 1 min. read

£20,000 fine levied for marketing 'likely to result in harm to children'

PhonepayPlus has fined a company £20,000 after determining that it was in "serious" breach of its rules around the promotion of premium rate services (PRS) to children after two sisters ran up a bill of more than £2,500 texting the service.

The regulator ruled that Captive Interactive Systems Limited (Captive) was responsible for promotional material posted on Facebook by a candidate in an online competition. Two sisters, aged 11 and 12, spent a collective £2,548 texting support for the candidate, who had entered a beauty pageant, after the candidate had "encouraged them to do so through Facebook," PhonepayPlus said in a statement. The regulator was alerted after the children's mother complained.

Captive helped operate a "children's [premium rate] service" that enabled the public to vote for their favoured candidates for 'Miss Teen Queen UK’.

Under the PhonepayPlus Code of Practice promotional material for children's services must clearly state how much the service usually costs and that children should only use the service if they have obtained permission to do so from whoever is responsible for paying the bill.

The Code also prohibits children's services, and associated promotional material, from containing anything that is "likely to result in harm to children or others or which exploits their credulity, lack of experience or sense of loyalty". The service or promotional material must not "encourage children to use other premium rate services or the same service again".

PhonepayPlus said Captive had been in breach of all those rules. It also ruled Captive in breach of rules that generally require either a service or information provider of a PRS to clearly state their identity and contact details, including their customer service phone number, for any promotion they run.

In addition to the fine Captive received a 'Formal Reprimand' and must repay users of its service a full refund if they claim the money back unless there is "good cause" to believe the claims are invalid, PhonepayPlus has ordered.

"The Tribunal upheld breaches under the Code of Practice ... relating to: the required contact details not being clearly stated; promotions not containing pricing information or stating that the bill-payer’s permission was needed before engaging in the service; the service and its associated promotional material being likely to result in harm to children; and the service and its promotional material encouraged repeat use (multiple voting) by all ages, including children," the regulator said.

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