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Premium rate phone regulator ICSTIS has imposed a record £250,000 fine on phone service provider Opera, following irregularities in GMTV's phone-in competitions.
In a review of the problem ICSTIS found that all correct phone-in entries submitted after a certain time each day had no chance of winning, despite consumers being charged for entering.
The problems occurred over a four year period with at least 18 million callers being charged for entering a competition they could not win. With the average cost of a call being over £1, the revenue generated by callers appeared to be in excess of £20 million.
The fine is the highest ever imposed by the regulator in its 21-year history. Other sanctions on Opera include a formal reprimand and a bar on running competition services for 12 months, which will be suspended subject to Opera undergoing and implementing the recommendations of an independent evaluation of its procedures to address what ICSTIS called "systemic failures within the company."
The company has also been ordered to pay full refunds to complainants. However, this has also been suspended for three months pending a review by ICSTIS of the success of the current refunds scheme.
ICSTIS chief executive George Kidd said: "Our Hearing Panel found clear evidence of fundamental failings within Opera Telecom. 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. We have ordered Opera Telecom to bring in outside consultants to sort out their business. If they don’t do this to our satisfaction, the bar on them running competition services will come into effect immediately."
"The size of the fine we’ve imposed reflects the very serious nature of the breach of our rules," he added.
Media regulator Ofcom has also been investigating GMTV’s role and responsibilities in the matter, and will report on its findings in due course. Recent reports suggested that Ofcom may consider a fine "in the millions."
