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Provider(s) Studio Telecom
Telephone network(s) Kingston Communications
Service type Pre-Allocated Prize Draw
Source of complaint(s) Public


Complaints were received about a direct mail promotion which stated that recipients had been selected to take part in a prize claim line and which detailed four mock cheques with the recipients name on them, each of which carried a premium rate number to call to claim a prize.


The following breaches of the ICSTIS Code of Practice (Tenth Edition) were raised:


                      Misleading (Paragraph 4.3.1a): The promotional letter was misleading because it suggested that each of the mock cheques were worth a cash amount, which was not the case as most of the four cheques related to non cash prizes. The promotion also incorrectly suggested that cash prizes started at 1000,  when the majority of callers would be awarded less than 100, and potentially as little as 1. The cash amounts detailed on the cheques bore no relation to the amounts that were likely to be won by most callers and the main body of the promotion failed to detail that anything other than cash prizes were available to be won. Finally, the terms and conditions were displayed at the back of the promotion in such a way that they were not immediately apparent.


                      Taking advantage of consumers (Paragraph 4.3.1 b):  The main body of the promotion suggested that callers would win a minimum of 1000 in cash, therefore callers are likely to have called all of the premium rate numbers at a total cost of 40 to ensure that this was the case. Callers would be less likely to call all of these numbers if they were fully aware that cash prizes started from as little as 1. As callers were not aware of on which cheques the cash prize they were expecting would be awarded, if after calling the first cheque number and not receiving it, they would have very little option but to call all of the numbers to ensure that they could claim the prize that they were expecting. 


                      Pricing Prominence (Paragraph 4.4.2): The promotional material failed to detail the cost of calling the premium rate numbers with sufficient prominence.


                      Competition Information (Paragraph 6.2 b &c): The promotional material failed to significant terms and condition with regard to the claim of non-cash prizes, or an adequate description of non-cash prizes. It is a requirement of the Code that all of this information is provided in the promotional material.


                      Exaggeration of winning a prize (Paragraph 6.2.8 b & c): The promotional material exaggerated the chances of winning a cash prize of 1000 or more and also exaggerated the chances of winning prizes in general.


                      Additional information (Paragraph 72.3): Information was requested about the promotion and operation of the service.


Studio Telecom responded directly to the breaches as follows:


Misleading (Paragraph 4.3.1 a): They disputed that the promotion suggested that a cash prize would be won on each cheque and stated that it was clear that the promotion was to be viewed collectively. They reasoned that as a promotional tool it was clear that the amounts on the mock cheques did not relate to a cash amount being allocated to all of the recipients. They disputed that the terms and conditions were not sufficiently clear and reasoned that the foot of the promotional letter referred to them directly.


Takes Advantage (Paragraph 4.3.1 b): They disputed that there was any suggestion that the cash prizes started at 1000 and stated that it was clear that the total prize amount being referred to included the value of non-cash prizes.


Pricing Prominence (Paragraph 4.4.2): They disputed that the pricing information was not displayed with sufficient prominence and reasoned that it was clear that information contained in the foot of the promotional letter referred to the following premium rate promotion. They stated that they had not used an asterisk to link the information and the premium rate number as the font they had used did not have such a symbol available.


Competition information (Paragraph 6.2.5 b & c): They did not specifically respond to this breach.


Exaggerate the chance of winning (Paragraph 6.2.8 b &c): They did not specifically respond to this breach.


Additional information (Paragraph 7.2.3): Some of the requested information was supplied.


The Committee upheld breaches of paragraphs 4.3.1a, 4.3.1b, 4.4.2, 6.2.5 b & c, 6.2.8 b and c and 7.2.3 of the ICSTIS Code of Practice (Tenth Edition).


Studio Telecom was fined 20,000 and access to the service was barred for 12 months. They were also instructed to issue reasonable and valid claims for refunds.

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