Reverse-billed SMS services punished by ICSTIS

Out-Law News | 10 May 2006 | 5:06 pm | 2 min. read

MX Telecom Ltd has been fined £40,000 by ICSTIS over an advert that a content provider, FTXT, placed in Loaded magazine for various reverse-billed SMS services, including downloads of adult images and "live sex text," that risked misleading consumers.

With reverse-SMS billing, a mobile phone owner is billed for receiving a text message, as opposed to sending one. Prices and conditions vary and, in a routine examination of magazine ads for such services, ICSTIS found such an ad in the March edition of Loaded that appeared to breach its Code of Practice.

ICSTIS, the Independent Committee for the Supervision of Standards of the Telephone Information Services, is the industry-funded regulatory body for all premium rate charged telecommunications services.

It said the terms and conditions for FTXT's services, as printed in the magazine, were barely legible. The text was too small and the background colour of the ad was too dark. This rendered important information about costs and unsubscribing illegible. It was "tantamount to being omitted," wrote ICSTIS.

The regulator also pointed to the following statement in the terms and conditions: "…subsequent messages charged at £1.50 photo's rcvp charged at 1 msg photos' sent at 2msgs". ICSTIS considered this "practically meaningless".

There were other problems. The ad's promotion for "live sex text" invited readers to "flirt and swap photo’s (sic)". But ICSTIS said it was unclear how this service would operate and whether the service involved simply swapping photos or whether there was also an element of chat.

The live sex text service was also advertised as being free. This was deemed misleading because only the first message was free; all subsequent messages would be charged at £1.50. Although this was made clear in the terms and conditions, there was nothing linking the word "free" in the main body of the ad to the terms and conditions. ICSTIS also expects pricing prominence. The pricing should be stand-alone, it reasoned, not three lines into a set of terms.

A promotion for a free adult mobile menu appeared to be contradictory. It stated: "no charge to view all our adult content including 1000's of photo's and videos." But the conditions referred only to a free "menu" and stated that the actual content would be charged.

This was not the first time that the ad had appeared. It had previously been adjudicated upon in November 2005, resulting in a fine of £40,000. After a review, whilst the breaches were upheld, the fine was reduced to £2,500 in January 2006. With the March edition of Loaded featuring the same ad, ICSTIS took action again.

MX Telecom Ltd responded to ICSTIS' findings, after consultation with FTXT, before yesterday's ruling was made. It pointed out that the ad had been submitted to Loaded in January 2006, before the outcome of the review of the first case. No matter, said ICSTIS. The service provider had been told in November 2005 that the ad was breaching the code.

Accordingly, in its capacity as the company responsible for compliance with ICSTIS' Code of Practice, MX Telecom Ltd was fined £40,000 and issued with a formal reprimand. It was also "encouraged" to seek copy advice for such promotions from the Secretariat of ICSTIS for the next three months.