Own-initiative investigation into Telecom Billing Services Ltd about suspected persistent network misuse

24 October 2007

Complainant: Ofcom own-initiative investigation
Investigation against: Telecom Billing Services Ltd
Case opened: 13 December 2005
Case closed: 29 September 2006
Issue: Whether Telecom Billing Services Ltd (‘TBS‘) is persistently misusing an electronic communications network or service by sending unsolicited and/or misleading text messages to consumers
Relevant instrument: Section 128 of the Communications Act 2003 (‘the Act')

Update note – 24 October 2007

Ofcom successfully brought a prosecution against TBS before the City of London Magistrates’ Court on 21 August 2007. The prosecution was brought under section 144(1) of the Act in relation to TBS’ failure to provide information to Ofcom in response to two formal information requests.

The Court found TBS guilty of the two charges brought by Ofcom and fined TBS a total of £10,000, comprising the statutory maximum of £5,000 for each offence. The Court also awarded Ofcom’s costs in full. TBS failed to answer a summons to attend the hearing.

End of update note

Update note – 14 June 2007

Ofcom has imposed a penalty of £50,000 on TBS under section 130 of the Act. A penalty notice was issued by Ofcom to TBS on 1 June 2007 for contravening section 128 of the Act by sending misleading and/or unsolicited text messages to mobile phone users that were designed to induce calls to adult chat services run by TBS, thereby causing recipients to suffer annoyance, inconvenience and/or anxiety.

The penalty notice follows the notification issued to TBS under section 128 of the Act on 29 September 2006. In that notification, Ofcom set out its findings that there were reasonable grounds to believe that TBS had engaged in persistent misuse of an electronic communications network and/or service in a way that causes annoyance, inconvenience or anxiety to consumers. TBS was given until 3 November 2006 to make representations in relation to the matters set out in the notification and to bring an end to its contravention of section 128 of the Act (taking steps to ensure that it was not repeated) and remedy the consequences of its contravention. TBS failed to make any representations to Ofcom and has failed to remedy the consequences of its contravention or provided any evidence that it has taken steps to ensure that its contravention is not repeated. Ofcom therefore decided to impose a financial penalty.

The maximum financial penalty Ofcom can impose under section 130 of the Act is £50,000 per notification. In setting the level of penalty, Ofcom has taken into account its statement of general policy for determining penalties (available at http://www.ofcom.org.uk/about/accoun/pg/) and its statement of policy on the persistent misuse of an electronic communications network or service (available at http://www.ofcom.org.uk/consult/condocs/misuse/misuse_state.pdf). Further details of Ofcom's consideration of the factors to determine the penalty are included in the section 130 penalty notice issued to TBS, a non-confidential version of which is available from the link below.

End of update note

Update note – 31 October 2006

A non-confidential version of the notification issued to TBS on 29 September 2006 under section 128 of the Communications Act 2003 has now been prepared and is available from the link below.

End of update note

Text published when the case was closed

Ofcom has closed this investigation and issued a Notification to TBS under section 128 of the Act. As a result of its investigation, Ofcom has reasonable grounds to believe that TBS has persistently misused an electronic communications service thereby causing others to suffer annoyance, inconvenience and/or anxiety.

Specifically, Ofcom has reasonable grounds for believing that TBS has used a text messaging service to send misleading and/or unsolicited text messages to consumers. As a result of the receipt of these misleading and/or unsolicited text messages, consumers have been induced into calling the adult chat services provided by TBS for which TBS has billed the consumers a minimum of £12.95.

The Notification issued to TBS on 29 September 2006 sets out the breaches of section 128 of the Act and the steps that TBS must now take, including remedying any consequences arising from its conduct. Ofcom would expect that the steps TBS takes to remedy any consequences arising from its contravention might include, but are not limited to, refunding in full and/or waiving all outstanding charges paid and/or otherwise payable by a customer to whom any misleading text message was sent by TBS, or to whom any unsolicited text message which contained sexually explicit text advertising its adult chat services, or which induced recipients to call sexually explicit chat services, was sent by TBS. TBS has until 3 November 2006 (‘the deadline') to complete these actions and to make representations to Ofcom. A non-confidential version of the Notification is currently being prepared and will be published shortly.

If TBS fails to cease the notified conduct and/or fails to remedy the consequences arising from its contravention of section 128 of the Act by the deadline, Ofcom may issue an Enforcement Notification under section 129 of the Act. Ofcom will also consider TBS' actions when deciding whether it should impose a penalty on TBS under section 130 of the Act. The maximum penalty that may be imposed under section 130 of the Act is £50,000 per contravention.

Update note – 25 July 2006

Further to imposing financial penalties on TBS as a result of its failure to provide information requested by Ofcom (see the update note of 6 June 2006 below for further details), TBS remains obliged to provide the outstanding information.

TBS has still not provided this information to Ofcom. Ofcom has therefore issued TBS with a second Notification under section 138 of the Communications Act 2003. This Notification, which was issued on 19 July 2006, gives TBS until 28 July 2006 to provide all the outstanding information and make representations about the matters notified. Please see below for a non-confidential version of the Notification issued to TBS.

Failure by TBS to comply with this second section 138 Notification may lead to Ofcom imposing further financial penalties under section 139 of the Act or bringing proceedings under section 144 of the Act.

Ofcom's investigation into the activities of TBS continues.

End of update note

Update note – 22 June 2006

A non-confidential version of the penalty notice issued to TBS on 6 June 2006 under section 139 of the Communications Act 2003 has now been prepared and is available from the link below.

End of update note

Update note – 6 June 2006

Ofcom has imposed penalties totalling £50,000 on TBS following failure by TBS to comply with requirements to provide information to Ofcom.

As part of its ongoing investigation into the activities of TBS, Ofcom issued two Notices to TBS under section 135 of the Communications Act 2003 (‘the Act') requiring the provision of specified information. Ofcom considers that TBS has failed to provide all the information required by those Notices. Given TBS' ongoing failure to comply with the section 135 Notices and having followed the procedures set out in the,Act, Ofcom has decided to impose penalties totalling £50,000 on TBS. A non-confidential version of the penalty notice issued to TBS under section 139 of the Act is currently being prepared and will be published shortly.

Ofcom's investigation into the activities of TBS continues.

End of update note

Text published when the case was opened

Ofcom has received a number of complaints from consumers regarding the activities of TBS. A number of these complaints allege that TBS has been sending unsolicited text messages to consumers. The complaints suggest that the content of the text messages vary, with some explicitly advertising the adult chat services offered by TBS and others merely requesting that the consumer call the number provided in the text message (which also appears to link through to the adult chat service). The adult chat services offered by TBS have a minimum charge of £12.95 per call.

Under section 128 of the Communications Act 2003 ("the Act"), a person misuses an electronic communications network or electronic communications service if:

  1. the effect or likely effect of his use of the network or service is to cause another person unnecessarily to suffer annoyance, inconvenience or anxiety; or
  2. he uses the network or service to engage in conduct the effect or likely effect of which is to cause another person unnecessarily to suffer annoyance, inconvenience or anxiety.

The investigation will focus on whether TBS has sent text messages to consumers and whether these text messages, or the events that flow from the receipt of the text messages, have caused annoyance, inconvenience or anxiety to consumers. Ofcom has, in accordance with section 131 of the Act, published a statement of its policy on persistent misuse. Ofcom is currently consulting on amendments to this statement, see www.ofcom.org.uk/consult/condocs/misuse/. In exercising any of its powers in this investigation, Ofcom will have regard to that statement and the proposed amendments.

Case Leader : Martin Hill ( e-mail:martin.hill@ofcom.org.uk)
Case Reference: CW/00880/11/05