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Record fine for premium rate phone line competition

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Women using a landline phone

© Rex Features / Burger/Phanie

The UK's regulator of premium-rate phone lines has today imposed a record £800,000 fine on a company that runs competitions in national newspapers.

Watchdog PhonepayPlus said that the level of fine reflected its concern that Churchcastle Limited had taken advantage of particularly elderly people.

The company's competitions, including word searches, were featured in 50 publications, but some entrants discovered that they had run up huge phone bills of hundreds of pounds.

Consumers completed the competitions and were then encouraged to enter a premium rate prize draw to win cash or jewellery.

After supplying their contact details, they were sent letters suggesting that they were close to winning a prize and should call a premium rate number to claim it.

This line was charged at 10p per minute from a BT Landline for the initial promotions, but rose to £1.53 per minute for the latter stages.

In its adjudication, PhonepayPlus said: "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."

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PhonepayPlus was alerted to the issue in many cases after people looking after elderly relatives found they had received phone bills considerably higher than usual.

The regulator received 15 complaints in total against Churchcastle Limited, which is based in East Sussex.

Complainants raised a number of issues against the company, including concerns over "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".

Speaking to BBC News, PhonepayPlus chief executive Paul Whiting called on people to be more vigilant when entering premium rate phoneline competitions.

"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," he said.

"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."

PhonepayPlus has also fined two other companies - Amazecell Limited and mBill - a total of £450,000 after they launched competitions online that signed entrants up to text messages that cost £5 each.

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