TV quiz firm handed record fine

Britain's Richard and Judy premium rate TV quiz was hit with a record fine today – as the phone operator said the problem was occurring in 2004.

Channel 4’s Richard and Judy popular teatime show urged viewers to call into the competition even though the shortlist of winners was closed.

Eckoh UK Ltd, which runs the phone lines, was today ordered to pay a £150,000 (€221,000) penalty by premium rate services regulator Icstis.

It told Icstis that the practice was going on when it took over the contract in September 2004.

Channel 4, which is carrying out its own investigation into the scandal, said Icstis had no evidence to suggest viewers had been misled for that long.

The broadcaster has offered to refund viewers hit by the problem between June 2006 and February 2007, when the scandal surfaced.

If it is proved that the problem was going on for much longer, it could have financial consequences for the broadcaster.

Icstis has ruled that the competition seriously misled viewers.

It is not within the watchdog’s jurisdiction to investigate Channel 4, but it has referred the case to the UK broadcasting regulator Ofcom.

Ofcom today said it will look at the broadcaster’s role in the scandal, investigating whether Channel 4 knew anything about what was going on and if it did not know what was occurring, why it did not know.

If it is found to have breached the broadcasting code, Ofcom could fine Channel 4.

Icstis, which is also investigating GMTV, the BBC’s Saturday Kitchen and Channel 4 show Deal Or No Deal, said that almost five million viewers entered the competition at a cost of £1 per call.

But 47% of calls were received after the shortlist of winners had already been chosen.

It said it was “shocked” to discover the problem began on the Channel 4 show as early as October 2004 and that it could mean having to pay around £1.5m (€2.2m) back to viewers – a figure which the broadcaster says is based on a complete lack of evidence on how long the problem went on for.

It said £3.08m (€4.5m) in revenue had been collected in the period between October 2004 to March 2007.

An Icstis spokesman said: “During our investigation, Eckoh have admitted that since they took over running the Richard and Judy competition service for Channel 4, the practice of pre-selecting shortlisted winners was going on throughout.

“Eckoh said that they simply carried on with the practice in respect of this competition as it was when they acquired the competition through their acquisition of Arrow.”

But Channel 4 said: “Icstis did not have any evidence before it which would have enabled it establish whether or not problems with You Say We Pay were on this scale prior to 29th January 2007.

“Channel 4 is still investigating the scale of the problem and will publish its findings as soon as possible.”

Channel 4 said it was shocked to learn that management at Eckoh were aware the competition was not being operated properly six months before the problems were made public.

A spokesman said: “We engaged Eckoh in good faith as a reputable and experienced service provider and we are very disappointed by their failure to ensure that all calls to the competition were handled properly.

“At no stage did Eckoh raise concerns with Channel 4 about the way You Say We Pay was run, so we are shocked to learn that management at Eckoh were aware the competition was not being operated properly at least six months before the problems were made public.

“Eckoh’s failure to alert Channel 4 as soon as they were aware a problem existed meant that thousands of viewers continued to be charged for improperly entered calls long after the problem should have been resolved.”

Channel 4 suspended the competition when it became aware of the problems and said it would donate any profit made from improperly entered calls to Great Ormond Street Hospital Children’s Charity.

It has also introduced a new monitoring regime to audit the performance of service providers on remaining phone-in competitions.

Eckoh complained that it had been made a “scapegoat” and that it would consider appealing.

A spokesman said: “Icstis accepts that Eckoh has learnt from this case, but nonetheless has imposed this sanction ’to provide incentive to other service providers who may not yet have taken the steps that Eckoh have to ensure compliance’.

“Because of this we can’t help but feel that we’ve been made a scapegoat and we will be considering an appeal once we have seen the result of the Ofcom investigation.”

Eckoh said the regulations governing premium rate services were “fundamentally flawed”.

It said: “Information providers, in this case Channel 4 and Cactus (the production company), are outside the jurisdiction of Icstis and it is unable to take action against them unless they agree.

“In our view where a television programme has misled the public in promoting calls to a premium rate service it would seem appropriate that either the broadcaster or production company, or both, should also be brought before the regulator.”

It added: “Nevertheless, we are extremely sorry for anyone who entered the competition and were not dealt with appropriately.”

Announcing the fine, Icstis chairman Alistair Graham said “such reckless disregard for viewers is unacceptable”.

He added: “The size of the fine reflects the very serious nature of the breach of our Code of Practice….The hearing panel found clear evidence of fundamental failings in the winner selection process.”