A ROSS-on-Wye firm has been fined £120,000 after 'duping' people into believing that they had won thousands of pounds.
Premium rate regulator PhonepayPlus said that misleading letters were sent to consumers from Wye Valley promotions Ltd that led them into thinking they had scooped prizes such as £20,000 in cash, £250 worth of shoppers vouchers, HD ready televisions and makeovers.
But in reality, PhonepayPlus said, it was just a premium-rate service 'prize draw'.
Consumers who complained included the relatives of a 93-year-old Alzheimer's sufferer, a 75-year-old woman and a couple both aged over 70.
PhonepayPlus said that the revenue generated by Wye Valley promotions' premium rate service was within £500,000 and it received 36 complaints.
To enter the prize draw cost consumers £1.53 per minute to call from a BT landline (with a minimum five minutes and 35 seconds charge) or six text messages at a cost of £1.50 per message, including network charges.
The regulator's independent tribunal ruled that the firm, based on Walford Road, has to refund all complainants who claim a refund for the full amount they spent on the service within 28 days.
It also has to provide evidence to the regulator that this has been done.
"Wye Valley Promotions Ltd mislead consumers with personal letters and 'claim forms' that led them to believe they had won big prizes, but in reality the letters were little more than adverts for a prize draw," said Jo Prowse, acting chief executive at PhonepayPlus.
"PhonepayPlus' tribunal has ruled that it was a very serious case and ordered that Wye Valley promotions must give a refund to consumers who request one.
"The PhonepayPlus code of practice exists to protect consumers and the vast majority of premium rate service providers who stick to the rules and practice good business.
"Misleading consumers in this way will not be tolerated."
In a statement, Wye Valley Promotions Ltd said that it was surprised that the investigation took place and it may appeal.
"We have shown PhonepayPlus copies of our promotions on 32 previous occasions over the previous two years and not once were concerns raised or changes requested," the statement said.
"Over a 13-month period, 36 consumers contacted PhonepayPlus but, on the evidence of its own research, the average proportion of participants who complain to PhonepayPlus about their experience in our sector is 200 times higher than this.
"In accordance with our refund policy we asked PhonepayPlus for the consumers’ contact details in order that we could refund them in full for telephone charges incurred.
"However, PhonepayPlus failed to respond, even when permission for disclosure had been given.
"We were eventually able to find the necessary details and refund the consumers.
"We can’t understand why PhonepayPlus should wish to prevent us from making refunds.
We are disappointed by PhonepayPlus’ decision and by the disproportionate sanction levied which is not remotely related to any consumer harm. We will review the full decision carefully with a view to appealing to an independent body.”