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Watchdog fines £100,000 for online 'squatting' that misled consumers

16 February 2012

Two firms who misled consumers by allowing their competitions to be promoted on websites with very similar web addresses to popular sites have been fined £100,000 each by PhonepayPlus, the UK regulator of premium rate telephone services (PRS).

In two separate cases, competitions were promoted on sites that ‘squat’ on addresses very close to popular, well-known websites such as Twitter, YouTube and Wikipedia. Competitions for iPads and Mac Books were promoted on websites with addresses such as wikapedia.com and twtter.com. This practice, known as ‘typosquatting’, takes advantage of consumers mistyping when they are searching for popular websites.

In both cases, the landing pages for the ‘squatted’ sites looked like the genuine sites the consumer was searching for – the ‘squatted’ sites used the same logos, colouring and fonts. These ‘squatted’ sites informed consumers that they had won or could claim a prize, such as an iPad. In both cases, consumers were given the impression that to enter or claim they simply had to enter their contact details and answer some questions. In both cases, one screen asked consumers to input their mobile phone number. Consumers then received a PIN number on their mobile phones to use for the website competitions. Consumers also began to receive texts to their mobile phones asking them quiz/survey questions, which they could text back to answer. Consumers were charged £1.50 for each question received on their mobile phones as well as £1.50 to answer each question. One complainant said that his fiancée ‘was tricked into a service on youtube’ and that she was charged £63 in total.

PhonepayPlus' Tribunal found that that the providers had breached the Code of Practice as a result of promotions that had misled consumers and that had not provided clear information about pricing. R&D Media Europe and Unavalley BV were both fined £100,000 and ordered to refund consumers. Both firms are based in Amsterdam.

The watchdog today published clear guidance to premium rate providers about how services should be marketed online and digitally. This guidance reminds PRS providers that they are responsible for all their digital promotions and, if they use marketing firms that mislead consumers through typosquatting, they will be in breach of the Code of Practice. The watchdog also issued a step-by-step guide for consumers about ‘typosquatting’ and what to look out for when they are searching online.

Paul Whiteing, PhonepayPlus’ Chief Executive, said:

“These judgements send a clear message to providers that they cannot play on the public’s trust in well-known websites to promote services. We want consumers to continue to have confidence in the digital market place and we will do everything we can to ensure that they do. Most providers support us in this area as they recognise that this market will only grow if consumers have such trust.”

Notes to editors

1. PhonepayPlus is the organisation (previously known as ICSTIS) that regulates premium rate services – the goods and services that you can buy by charging the cost to your phone bill and mobile pre-pay account. Further details of its work can be found at: www.phonepayplus.org.uk 

2. If you have any questions, please contact the PhonepayPlus Press Office on (020) 7940 7440 / 07912 774 339 / pressoffice@phonepayplus.org.uk