TGH Management Limited (Case reference: 02400)
| Case Number | 02400 |
| Published date | 15 July 2010 |
| Year | 2010 |
| Adjudicated Party | TGH Management Limited |
| Procedure Type | Oral Hearing (Phone-Paid Services Authority) |
Case Refs: 807353/MS and 778256/CB
IN THE MATTER OF:
PHONEPAYPLUS LIMITED
Executive
- and -
TRANSACT GROUP (HOLDINGS) LIMITED
Respondent
ORAL HEARING DECISION
TRIBUNAL
Michelle Peters (Chair)
David Clarke
David Jessel
Hearing at the offices of PhonepayPlus Ltd
on 2nd and 3rd June 2010
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A. INTRODUCTORY
1. This matter concerns alleged breaches of the PhonepayPlus Code of Practice (11th
edition, amended April 2008) (“the Code”) by the Respondent, Transact Group
(Holdings) Limited (“Transact”).
2. On 29th October 2009 a Tribunal held that Transact was in breach of the Code, and
it imposed a fine of £250,000 together with a formal reprimand. Pursuant to
Section 8.11 of the Code, Transact requested an oral hearing to consider the matter
afresh. This took place on 2nd and 3rd June 2010 before the Oral Hearing Tribunal
(“the Tribunal”) chaired by Michelle Peters sitting with David Clarke and David
Jessel.
3. The PhonepayPlus Executive (“the Executive”) was represented by Mr Selman
Ansari (of Bates, Wells & Braithwaite LLP). Transact was represented by Mr Brian
O‟ Neill QC (instructed by Barker Gillette LLP). The clerk to the Tribunal was
Muhammed Haque of Counsel.
4. The Tribunal makes a preliminary comment that whilst these proceedings are not
equivalent to a court of law with strict rules of evidence, it should undoubtedly act
in a manner consistent with natural justice and fairness, and in a way that furthers
the interests of justice. The Tribunal reminds itself of its obligation under
Paragraph 1.1 to:
… have regard to five principles of good regulation, namely: transparency,
accountability, proportionality, consistency, targeting.
5. The Tribunal further emphasises the importance, and necessity, of transparency and
openness. The system set out in the Code places the regulatory burden heavily, but
not exclusively, upon service providers. In particular, paragraph 3.3.1 provides that:
Service providers are responsible for ensuring that the content and promotion of
all of their premium rate services (whether produced by themselves, information
providers or others) comply with all relevant provisions of this Code.
6. Because the Executive has no formal investigative powers, where all relevant
information is retained within the service provider‟s control the Tribunal regards it
as absolutely fundamental that the service provider be completely transparent in co-
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operating with any investigation by the Executive. In these circumstances any lack
of transparency would tend to undermine the entire regulatory process. The
Tribunal therefore regards any attempt to mislead it or the Executive as extremely
serious. The Tribunal equally regards any deliberate lack of co-operation, or failure
to provide relevant information, as being very serious.
7. In determining the facts in this case the standard of proof is the balance of
probabilities, the legal burden being on the party who asserts any issue. It is also
common sense that where allegations of fraud or deception are made, then the
evidence must be cogent and compelling.
8. However the Tribunal is also mindful of the fact that the Executive in many
instances will not be in a position to obtain the relevant evidence or compel its
production. This may of course also apply to the Respondent service provider.
Thus, whereas the legal burden of proof may well remain with the party asserting,
the evidential burden of proof could fall upon the party holding the relevant
information. Where information has deliberately been withheld, the Tribunal may,
if appropriate, draw adverse inferences against the withholding party.
B. THE DECISION
9. The Tribunal‟s decision upon the alleged breaches of the Code is as follows:
(i) Transact was in breach of paragraph 5.2 of the Code because the
promotion of the services in question was unlawful.
(ii) Transact was in breach of paragraph 5.4.1(a) of the Code because the
promotional material in question was misleading.
(iii) Transact was in breach of paragraph 5.4.1(b) of the Code because the
services took unfair advantage of circumstances which made consumers
vulnerable.
(iv) Transact was in breach of paragraph 5.7.1 of the Code because clear pricing
information was not provided to users prior to them incurring a charge.
(v) Transact was in breach of paragraph 5.8 of the Code because the identity of
the service provider was not clearly stated.
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