Out-Law News | 25 Sep 2007 | 8:11 pm | 2 min. read
The regulator said that callers who were prevented by Opera from having any chance of winning competitions had lost £20 million on the phone lines. It said that 18 million people had paid for calls which were received after potential winners had been picked by Opera.
"The sums of money involved were gigantic: with the average cost of a call being well over £1, the revenue generated by callers with no hope of winning appears to have been in excess of £20 million," said ICSTIS in its submission to the oral hearing of the case. "It was the worst case which ICSTIS had come across in terms of the numbers of consumers affected and the amount of money at stake."
Though the regulator has banned Opera from operating competitions for a year, that ban has been suspended to give Opera time to overhaul its management structures and procedures. It will be re-evaluated by ICSTIS in three months' time and will be lifted altogether if ICSTIS approves the changes, said an ICSTIS spokeswoman.
Opera ran the GMTV phone, text and internet competitions for four years but was fired after an investigation by television programme Panorama exposed problems with the process. It found that finalists in the competition for cash prizes were chosen and sent to GMTV before the phone lines were closed. Subsequent callers, therefore, had no chance to win the competition.
“Our Hearing Panel found clear evidence of fundamental failings within Opera Telecom," said ICSTIS chief executive George Kidd. "The company showed a reckless disregard for the interests of callers, with scant evidence of any attention being given to compliance with our Code of Practice."
"The consumer harm caused was aggravated by the sheer number of callers who paid to enter the competition but had no chance of winning, the huge amount of revenue that was unfairly generated from these callers, the length of time over which the practice had been going on and the extensive damage caused to public trust in phone-in competitions," he said.
Premium rate television phone in competitions have been the subject of controversy this year, starting with a competition on Channel 4's Richard and Judy show, which was found also to allow callers to pay to enter when they had no opportunity to win.
"The decisions we’ve announced today are part of a wider examination of events," said Kidd. "Today’s adjudication sends a clear message to any company offering phone-paid services: your absolute responsibility is to the public who use your services. Cutting corners for the sake of convenience or to boost revenues is simply unacceptable and has serious consequences."
Ofcom is also investigating the GMTV competitions, and any Ofcom fine is expected to be far higher than the £250,000 levied on Opera.
ICSTIS has issued fines totalling £197,500 in recent weeks over other competition irregularities on UK television.
OUT-LAW is running a series of free breakfast seminars across the UK in October that explain the legal regime for free draws and prize competitions.