Naming Case (Case reference: 04086)
| Case Number | 04086 |
| Published date | 28 March 2012 |
| Year | 2012 |
| Adjudicated Party | Naming Case |
| Procedure Type | Naming Case (Phone-Paid Services Authority) |
THE CODE COMPLIANCE PANEL OF PHONEPAYPLUS
TRIBUNAL DECISION
Thursday 15 March 2012
TRIBUNAL SITTING No. 95 / CASE 2
CASE REFERENCE: 04086
THIS CASE WAS BROUGHT AGAINST THE NAMED INDIVIDUAL UNDER PARAGRAPH
4.8.6 OF THE CODE
BACKGROUND
(i) Summary relating to Mr Kevin Swayne
On 10 November 2011, the Executive presented a case to Tribunal relating to TGH Management
Limited (formerly Transact Group (Holdings) Limited). The case related solely to the non
compliance with a direction made under paragraph 3.1.4 of the PhonepayPlus Code of Practice
(12th Edition, dated 1 September 2011) for outstanding payments totalling £294,842.51 to be
made to PhonepayPlus. The outstanding payments related to invoices that had gone unpaid
following a previous case against Transact Group (Holdings) Limited, which culminated in
decisions being made by an oral hearing tribunal in June 2010 and subsequently an Independent
Appeals Body Tribunal in May 2011 (see case 2 below)
The Tribunal of 10 November 2011 upheld a breach of Code paragraph 3.1.4 against TGH
Management Limited which, overall, it assessed as very serious. The Tribunal imposed the
sanction of a formal reprimand, having taken into account the fact that the Executive had
commenced debt recovery proceedings and the fact that the company was now in liquidation.
The Tribunal also instructed the Executive to initiate this process which may lead to the
prohibition of Mr Swayne, a director of TGH Management Limited (an associated individual)
under paragraph 4.8.2(g) of the Code.
(ii) Relevant Code Provisions
• Paragraph 4.8.6 of the Code states:
“If a Tribunal considers that it may wish to make a prohibition under sub-paragraph
4.8.2(f), 4.8.2(g) or 4.8.2(h) in respect of any named individual, PhonepayPlus shall first make
all reasonable attempts to so inform the individual concerned and the relevant party in writing. It
shall inform each of them that any of them may request an opportunity to make informal
representations to the Tribunal and of the right of any of them (or PhonepayPlus itself) to
require an oral hearing”.
• The sanction available for imposition under paragraph 4.8.2(g) of the Code is worded:
“The Tribunal can apply a range of sanctions depending upon the seriousness with which
it regards the breach(es) upheld. Having taken all relevant circumstances into account, the
Tribunal may impose any of the following sanctions…“prohibit a relevant party and/or an
associated individual found to have been knowingly involved in a serious breach or a series of
breaches of the Code from providing, or having any involvement in, any premium rate service or
promotion for a defined period.”
• An associated individual is defined at paragraph 5.3.9 of the Code:
“Associated individual’ is any sole trader, partner or director or manager of a premium rate
service provider, anyone having day to day responsibility for the conduct of its relevant business
and any individual in accordance with whose directions or instructions such persons are
accustomed to act, or any member of a class of individuals designated by PhonepayPlus”.
SUBMISSIONS AND CONCLUSIONS
Knowing Involvement in a serious breach or series of breaches of the Code
1. The Executive provided the following evidence to Mr Swayne which indicated that Mr
Swayne was knowingly involved in a very serious breach of the Code in respect of the
TGH Management Limited case considered by the Tribunal on 10 November 2011.
The Executive also provided Mr Swayne with evidence of other previous breaches
(serious or otherwise) upheld against various providers, including Transact Group
(Holdings) Limited (which changed its name to TGH Management Limited on 11
January 2011).
Case reference 03185 (1) – TGH Management Limited
This case was adjudicated on 10 November 2011 and was the trigger case in which
the Tribunal instructed the Executive to commence the prohibition procedure against
“Kevin Swayne” under paragraph 4.8.6 of the Code. The case was brought against
the Level 1 and/or Level 2 provider, ‘TGH Management Limited’, formerly Transact
Group (Holdings) Limited.
The investigation related specifically to a failure by TGH Management Limited to act on
a direction given by PhonepayPlus to make payment of outstanding payments of
£294,842.51 (see sanctions related to case 807353 / 778256 below). On 23 August
2011, the Executive sent a formal reminder for payment to be made by 30 August
2011.
As no payment was received, the Executive issued a formal direction under the Code
on 16 September 2011, requiring TGH Management Limited to make payment in full
by 30 September 2011. The Executive received no response or payment and
subsequently a breach of paragraph 3.1.4 of Code 12, for not acting on a direction,
was upheld by the Tribunal.
The Tribunal imposed a sanction of a formal reprimand and found that the final
assessment of the breach was very serious. TGH Management Limited commenced
proceedings to voluntarily liquidate the company following its receipt of the breach
letter from the Executive. A liquidator was appointed on 3 November 2011.
The following facts and evidence suggested that Mr Swayne was knowingly involved in
this breach:
• Mr Swayne was at all relevant times, a director of TGH Management Limited and
as such was responsible for the management of the company at the time that
this very serious breach occurred;
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