Android app firm fined £50,000 for deceiving consumers
Another SMS premium rate deception punished
A Russian firm has been handed a £50,000 ($79,500) fine and ordered to repay all UK customers for marketing a dubious Android app that generated a £10 premium rate £10 SMS charge simply for downloading it.
According to premium rate regulator PhonePayPlus, Connect Ltd (also known as SMSBill) offered access to its games portal 7mobi.net using an app asked users “do you agree with the rules of downloading” without making clear that agreeing generated an immediate charge.
Anyone who studied the agreement in advance was presented with eight pages of terms and conditions within which was buried an inaccurate reference to a £5 charge for the service.
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In the regulator’s view, the design of the service was misleading, took charges without proper consent, describing the case as “very serious.”
Moscow-based Connect generated revenue of up to £250,000 from the campaign but will now have to pay the £50 fine in addition to refunding everyone misled by the app.
The company is not the first East European mobile firm to have been fined for misleading UK consumers in recent months.
In May a Latvian company was given an identical £50,000 fine for tempting users into downloading what appeared to be Android games apps that generated a minimum charge of £15 in the form of premium rate SMS fees.
A reported 1,400 UK users were duped by the bogus apps, with consumers believed to have been stung to the tune of £27,850 by the time it was halted.
In February, two Dutch companies were fined for a typosquatting scam (using domains that are almost letter identical well-known ones) in which visitors were invited to enter SMS competitions to win Apple iPads.
Comsumers were then charged £1.50 for each quiz question sent as part of the competition without those charges having been explained in advance. The pair were fined £100,000 each.
Mobile and premium rate deception is now seen as a relatively easy way to dupe consumers the world over. Scams are easy to set up, have a simple and almost instant payment mechanism and until recently complaints were hard to make.
Studied deception lies at the core of many of these campaigns, that is not explaining charges in advance to gain informed consent; of course, if the scammers explained the charges in advance almost no sane person would enter.
What is less clear is the international scale of some of these campaigns. Because a regulator acts on one country does not mean that firms are not raking in large profits by deceiving consumers in other countries.