Record £800,000 fine for premium phone line
The regulator for premium-rate phone lines has imposed a record fine on a company that runs competitions in national newspapers.
Churchcastle Limited was fined £800,000 after some entrants discovered that they had run up hundreds of pounds in phone bills.
The regulator, PhonepayPlus, said it was particularly concerned elderly people had been taken advantage of.
The competitions, such as word searches, featured in 50 publications.
Consumers completed the competitions to be entered into premium rate prize draws for large cash prizes or jewellery.
They were asked to provide contact details and received letters suggesting they were close to winning a prize and should call to claim it.Targeting the elderly
The cost of entering the competitions varied between 10p per minute from a BT landline for initial promotions or stages to £1.53 per minute from a BT landline.
PhonepayPlus said in its adjudication: "The length of calls varied from just under three minutes to six minutes and 55 seconds. In order to claim additional "matching" items of jewellery or enter additional competitions, consumers were required to stay on the call for an extended or additional period of time."
Most of the money spent on the call went to Churchcastle and the regulator says the rate was usually hidden in the small print.
PhonepayPlus said in many cases it was alerted by people looking after elderly relatives, the majority of whom were aged over 80, who had discovered phone bills which were hundreds of pounds higher than usual.
The regulator said it had received 15 complaints regarding the company, which is based in East Sussex, since September 2011.
The complaints raised "a number of concerns regarding the size, visibility and readability of the pricing information, 'bill shock', misleading promotions including the poor quality of jewellery items and the large volume of highly personalised direct mail marketing promotions".
PhonepayPlus chief executive Paul Whiteing warned anybody considering taking part in competitions that asked for their phone numbers to be especially vigilant.
He said: "People must know the price before they take part in any premium rate service, and in this situation people didn't know the price and didn't understand that.
"Where you're taking part in a competition or something like that and you're asked for your mobile phone number, because it's linked to your phone bill there's the potential for things to go wrong - so just beware, read the small print, understand what you're taking part in."
Churchcastle has not commented on the fine.
Two other companies - Amazecell Limited and mBill - have also been penalised. They had promoted competitions online in which entrants signed up for text messages costing £5 each. The regulator has fined those companies a total of £450,000.