Telecom2 (Case reference: 191951)
| Published date | 27 August 2024 |
| Year | 2024 |
| Case Number | 191951 |
| Adjudicated Party | Telecom2 |
1
Statement of Facts and Evidencepertaining to the investigation into
Telecom2 Limited
Introduction
1.This statement sets out the facts and evidence relating tothe Phone-paid Services
Authority’s(‘PSA’)investigation into Telecom2 Limited (‘Telecom2’) in August 2021.
This statement also sets out the breaches and sanctions agreed by the partiesand has
been produced and published in accordance with paragraph 5.5.2 of the PSA Code of
Practice (15thEdition) (“Code 15”), together with the formal agreementmadeby the
partiesto settlethe matter.
2.The investigationinto Telecom2 concernedthe adequacy ofits due diligence, risk
assessment and control (“DDRAC”) measures over a 7-year period. The period
commenced whenthe 14thEdition of the Code of practice(“Code 14”) wasin forceand
continued for some time after Code 15 came into force. During the investigation a
second breach was raised due toTelecom2’sfailureto fully respond to a direction from
the PSA.
The investigation
3.Telecom2 is a UK based Network operator who havebeen operating for 15 years.
Telecom2 provides a telecommunication connectivity platform service to (and
contracts directly with) merchants operating premium rate services (PRS),
4.The PSA became aware of potential DDRAC issues following high levels of complaints
received in relation to its merchant providers. During the investigation the PSA relied
on evidence from consumer complaints and service monitoring. It also relied on
information supplied by Telecom2, including detailed information relating to five of its
merchants, it’s DDRAC process, procedural documentation and supplementary
documentation. The PSA also considered eighteen underlying investigations that had
reached a regulatory outcome between March 2018 and the date the Enforcement
Notice was issued (January 24), as well as data gathered through a thematic review it
conducted in relation to information, connection and signposting (“ICSS”) services (July
2021 – June 2022).
5.Following initial directions and requests for information by the PSA to Telecom2
regarding a number of its clients, the PSA considered that Telecom2 had conducted
satisfactory due diligenceand that there was insufficient evidence to suggesta breach
of this under either Code 14 or Code 15. The case subsequently put forward by the
PSA was therefore focused on risk assessment and risk control (“RAC”) requirements
of the Code.
6.Having considered the available evidence the PSA concluded that Telecom2 failedto
conduct adequate RACthrough failing to properly identify risks, set proportionate
levels of risk, conduct in-life assessment or put appropriate measures in place to
mitigate riskand that these amounted to a breach of the Code. In addition, it failed to
adequately respond to issues of non-compliance and incidents.
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