Industry watchdog Phone-paid Services Authority or PSA has fined Itech Logic Ltd after it was found to have committed three breaches to the Code of Practice, including the failure to handle customer complaints properly.
The regulator has received numerous complaints regarding the company, including failure to get a response from the company and delays in receiving refunds or not receiving the full amount they are owed.
The three breaches involve the provision of misleading or false information, registration, and complaints handling. The company was fined for £250,000 and is barred from the service until all sanctions have been met.
Itech Logic Ltd. is a quiz competition service operating under five different brand names, including ‘voucher.me’, ‘txtwinner’, ‘txtintl’, ‘smsunltd’, and ‘britsms’. It was registered in July 2011 and operated using shortcodes.
These subscription services cost up to £4.50 per week, with £1.50 allotted per message and £3.00 for two messages sent in a week. It allows subscribers to answer a question, giving them a chance to win prizes. Consumers opt-in the promotion by using the assigned shortcodes, which the company has several of these dedicated or shared numbers.
Consumers have reached out to the PSA to relay their frustration over the struggle to contact Itech. A complainant who unknowingly got subscribed to the service complained that it was hard to reach Itech. They stated that they sent an email three times and called four times but have not gotten any form of response to the attempted communication.
Some customers who requested a refund complained of significant delays, saying that the company failed to fulfill the repayment on the given date. Other clients only received partial refunds—one complainant who asked for a £252 repayment was only able to receive £36.
Several customers contacted the PSA to air their grievances against Itech, saying that they received no response when complaining about unsolicited charges and delayed refunds. The PSA logged a total of 85 complaints from October 2018, prompting an investigation on the negative goings-on within the company’s operations.
The PSA determined that the firm breached three sections of its Code and sent a Warning Notice to Itech. It detailed three breaches, including Rule 2.6.1 (complaint handling), Paragraph 3.4.14a (registration), and Paragraph 4.2.2 (providing misleading or false information).
In terms of the registration, the authority noticed that the company began at the time Code 11 was implemented, which did not require Itech to register with the PSA. However, the enforcement of Code 12 in September 2011 mandated the service to be listed officially with the regulator. However, Itech failed to register several shortcodes they use, which was a requirement whether or not the number is active or not.
While the registration breach is considered a moderate offense, two of the rules Itech breached, Rule 2.6.1 and Paragraph 4.2.2, are considered very serious. Although the registration fiasco was short-lived as most of the numbers were no longer in use, the regulator felt that it could have affected consumer confidence in services similar to Itech.
The serious breaches called for grave sanctions based on the preliminary assessment of the PSA. It has served a formal reprimand to Itech, placing a fine of £420,000, which is broken down between the three breaches, namely: £200,000 for Rule 2.6.1, £20,000 for Rule 3.4.14(a), and £200,000 for Rule 4.2.2.
Further, Itech was sanctioned to remedy the registration breach by officially logging all the shortcodes it has used since entering the market into the PSA registration scheme. It is also required to undergo a compliance audit to be performed by an independent third-party group that the PSA approves. The audit will include the evaluation of the firm’s compliance with registration and complaints handling for phone-related services.
Lastly, Itech is barred from accessing the network until the compliance audit is undertaken and satisfies all the standards set by the PSA. The company has to remedy all the breaches and successfully fulfill all the sanctions before it can continue operating as a quiz competition service.