Transact Group (Holdings):did Phonepayplus allow scam to run to increase fine?

[El Gringo]

29 October 2009
Information provider N/A
Service provider Transact Group (Holdings) Limited
Service provider location Cambridgeshire
THIS CASE WAS BROUGHT AGAINST THE SERVICE PROVIDER

BACKGROUND

The PhonepayPlus Executive (the ‘Executive’) received 106 complaints in relation to a number of chat and date services operating on shortcodes 80898, 80877, 69991, 84048 and 89885. Complainants stated to have received unsolicited promotional text messages (WAP-push messages) and chargeable WAP-push messages (charged at £1.50 per text in relation to shortcodes 80898, 80877, 84048 and 89885, and £3 in relation to shortcode 69991).

Following consumer complaints and, during the course of the Executive monitoring, it was established that consumers appeared to have been misled into entering into the WAP service. In addition, it appeared that the text messages received by complainants had contained no pricing or contact information. Furthermore, complainants had not received an initial subscription text message or any subscription reminder text messages.

(i) The Service

The Executive monitored four ‘09’ prefixed sexual entertainment services (‘sex lines’) belonging to the same Service Provider. The details of this monitoring exercise are as follows:

The service named ‘1 minute Quickie’ operating on the premium rate number 0909 771 7111 was monitored from this mobile phone number on 1 June 2009. The service was promoted in the magazine named Clout, which is a supplement to the Sunday Sport newspaper – Issue 11, 31 May 2009.

(ii)The Investigation

The Executive conducted this matter as a Standard Procedure investigation in accordance with paragraph 8.5 of the Code.

The Executive issued a breach letter to the Service Provider on 6 August 2009 raising potential breaches of paragraphs 5.2, 5.4.1a, 5.4.1b, 5.7.1, 5.8, 5.12, 7.3.3a&b, 7.12.4a-f and 7.12.5 of the PhonepayPlus Code of Practice (11th Edition Amended April 2008) (‘the Code’). The Service Provider provided a formal response to the breach letter on 4 September 2009. The Executive originally ran the enquiries into these services as two separate investigations; however, it decided prior to the breach letter that the two investigations related to the same type of service and were therefore merged to form one investigation.

The Tribunal made a decision on the breaches raised by the Executive on 29 October 2009 following, having heard informal representation from the Service Provider.

SANCTIONS

The Tribunal’s initial assessment was that, overall, the breaches taken together were very serious.

In determining the sanctions appropriate for the case, the Tribunal took into account the following aggravating factors:

* The behaviour of the Service Provider had been reckless in its failure to adopt systems of adequate technical quality.
* There was material consumer harm as there were 106 complaints regarding the service.
* The cost paid by individual consumers was high – some consumers were charged several hundred pounds.
* Concealed subscription services have been singled out for criticism by PhonepayPlus.
* The Service Provider supplied the Executive with false and misleading information in relation to the message logs which stated that regulatory messages had been sent when, in fact, this was not the case.
* The Tribunal considered that the Service Provider – Transact (Holdings) Ltd – was a new company and, as such, had no breach history. However, the Tribunal noted the breach history of Transact Group Limited, which had the same directors as the Service Provider and had been involved in similar services over this period. The Tribunal considered that, in these circumstances, it was reasonable to take this into account as an aggravating factor.

There were no mitigating factors for the Tribunal to take into account.

The revenue in relation to this service was in Band 1 (£500,000+).

Having taken into account the aggravating factors, mitigating factors and the other assessment criteria listed above, the Tribunal concluded that the seriousness of the case should be regarded overall as very serious.

Having regard to all the circumstances of the case, including the number and seriousness of the Code breaches, and the revenue generated by the service, the Tribunal decided to impose the following sanctions:

* Formal Reprimand;
* A fine of £250,000;
* The Tribunal ordered that claims for refunds are to be paid by the Service Provider for the full amount spent by complainants, except where there is good cause to believe that such claims are not valid.
----------------------------------------------------

http://www.creditgate.com/search/sea...BT=Full%20Data

Company Name:
TRANSACT GROUP (HOLDINGS) LIMITED

Company No: 04037266
Registered Office:
Incorporated: 20/07/2000
COMMUNICATIONS HOUSE
STATION COURT
GREAT SHELFORD
CAMBRIDGESHIRE
CB22 5LR

Company Type: Private Limited
Report Status: Full Data
Accounts Type: Group Accounts
Latest Accounts to: 31/12/2008
Latest Return to: 19/07/2009
-------------------------------------------------
https://secure.creditgate.com/search...CompanyReports

The Transact Group
Station Ct
Station Rd
Cambridge
Cambridgeshire
CB22 5NE

TRANSACT GROUP (HOLDINGS) LIMITED
COMMUNICATIONS HOUSE
STATION COURT
GREAT SHELFORD
CAMBRIDGESHIRE
CB22 5LR

TRANSACT GROUP LIMITED
MCR 43-45 PORTMAN SQUARE
LONDON
W1H 6LY
W1H 6LY

Transact Group Ltd
Station Ct
Station Rd
Cambridge
Cambridgeshire
CB22 5NE
-------------------------------------------
so why did they allow such an obvious scam to run and run?

[Hamlet]

Can you tell me why Mr Hugh Ch* gives transactgroup.net as his website in the Telemedia Network?

Hugh Ch* - Director Hugh has 18 years experience in the telemedia and telecommunications sector working in the USA, Hong Kong and the UK. His experience ranges from Hongkong Telecom to pioneering various enterprises including the telemedia trade organisation NOC (Network for Online Commerce) where he serves as President. Prior to joining betMobi, Hugh was the CEO of the internet e-commerce company Electronic Transaction Corporation and prior to that he spent nine years with 3 Net Communications Limited as Founder and Managing Director; 3 Net was responsible for performance and strategy of the businesses of Interwest Communications International Limited (Hong Kong), including the founding of the carrier Interoute plc.

no rotten apple, but a tree rotten to the roots!


---
edit: ah, I see:

Transact Group ~

BluVu.tv The Vu Group UK-Cambridge Kate Blu
BluVu.tv The Vu Group UK-Cambridge Hugh Chambers
BluVu.tv The Vu Group UK-Cambridge Andy Middleton (does he own Middleton Holdings? just kidding)
BluVu.tv The Vu Group UK-Cambridge Angela Norrie
BluVu.tv The Vu Group UK-Cambridge Kevin Swayne (f. Global Comms, was NOC contact for TG) (founder of TG & 1playtv,...)
BluVu.tv The Vu Group UK-Cambridge Aubrey Welch
BluVu.tv The Vu Group UK-Cambride Stuart Wilmott


BLUVU.TV
Transact Group Holdings Limited
Communications House
Station Court
Great Shelford
Cambridge cb22 5ne GB
+44 (0) 1223 551000

[Hamlet]

[for the veeeery advanced readers]


In 2000
"Anew London-based company is launching what it claims is the first global on-line billing service, allowing users to purchase goods from e-commerce sites via their telephone bill as well as via proprietary payment and pre-paid cards.

Global Internet Billing (U.K.) Ltd. (GIB), setup last year by former executives at Interoute Ltd. [John Mittens?], aims to make e-commerce available to a wider audience.

"It is possible that [Internet billing] will allow users that don't have credit cards, or live in areas where there is not a predominance of credit cards, to conduct on-line transactions," said Scott Smith, director of Internet strategies, at the Yankee Group Europe, of Watford, England. "Consumers have shown through the last 100 years that they like aggregated billing through their service provider."


"Here's the state of play:
BT Charge you for the phone call
A share goes to the content provider
ICSTIS (the regulatory body for premium rate) restricts the value of such
calls to £20, and the top rate in this country for most content is £1 per
minute.
In some territories (cf Belgium, Germany, Australia) 'drop charges' can bill
you substantially immediately upon connection, with again a proportion going
to the 'content provider'

GIB runs a global premium rate ISP which can charge in this way for
content/downloads anywhere in the world. Email off list if anyone's
interested. "


The FTC was not that amused:
http://www.ftc.gov/opa/2000/10/verity.shtm

"To exploit ACL's right to carry calls to these Madagascar phone numbers, ACL contracted with Global Internet Billing, Inc. (“GIB”) for GIB to market the dialer program to adult-website operators and to use its best efforts to generate a minimum usage volume. ACL agreed to provide GIB with the Madagascar telephone numbers for inclusion in GIB's dialer program. ACL paid a portion of call revenues to GIB, which in turn paid the adult-website operators, effectively making GIB a paid intermediary between ACL and the website operators. ACL also needed to arrange for the carriage of calls from a computer's modem to the U.K. internet servers that would connect the calling computer to an adult website in the United States. Accordingly, in January 1999, ACL contracted with two companies, AT & T and AT & T U.K., to carry the calls. AT & T agreed to carry calls placed to ACL's Madagascar phone numbers to the London facilities of AT & T U.K. AT & T U.K. would then carry the calls to the designated U.K. internet servers. AT & T was responsible for
billing and collection for these calls, and using ANI information, AT & T billed phone-line subscribers for the ACL calls on their regular monthly telephone statements. "

oh those old times, Hugh,... at&t, Optus, Gilsan, Moldova, Vanuatu, Sao Tome - and no Screamagers out there!

[Hamlet]

* The Tribunal considered that the Service Provider – Transact (Holdings) Ltd – was a new company and, as such, had no breach history. However, the Tribunal noted the breach history of Transact Group Limited, which had the same directors as the Service Provider and had been involved in similar services over this period. The Tribunal considered that, in these circumstances, it was reasonable to take this into account as an aggravating factor.

horsewhip!

where is Mirror Investigative? Go and get them - and take the horsewhip with you.

[silentgenius]

Hmm - the fines issue looks similar to the recent Zamano case ("PPP redefine victim and theft" thread), where 450 complaints were allowed to accumulate, and the older Jack Barnard one where PPP waited seven months before invoking the "Emergency Procedure" - after the service had been shut down.

A new revenue raising exercise??

[Hamlet]

http://whocallsme.com/Phone-Number.aspx/80898
http://whocallsme.com/Phone-Number.aspx/80877

no breach history, of course, but a breach history book.

17 Jun 2008
I just had that, got two messages from them and it costs 1.50 per message sent or received.
It's cost me nearly a fiver so far for something I haven't signed up for. Scamming bar-stewards.

Apparently you have to text back "STOP" or some people say "STOP ALL" to stop the messages, but that also costs 1.50. I'm awaiting a phone call back from Orange at the moment.

And yes, it was a saucy message from someone called Sintia from Wisbech.

I ripped this next part from some other internet searching on this matter:

If you have been stung, here are their details:

Shortcode: 80877
Company name: Transact Group Ltd
Contact number: 01223 551 000.

There is a BIG hole in the regulatory framework in which a company can send you chargeable messages with no positive opt-in (not to mention that it costs £1.50 to opt-out which is in itself a disgrace). The way it works means that if they send you the initial message and you are, say, on holiday for a few weeks (having sensibly left your phone in the UK to avoid rip-off roaming charges!) you could get home and find dozens of these messages on your phone, each costing £1.50. No doubt the operator would probably reimburse, but I bet most people don't notice, don't have the time to pursue it, or just get fatigue talking to faceless operators in another country who don't really understand what you are saying.

I will be complaining to the regulator and ask that as many people as possible do the same.

The same people again... and again...

Do you think Peter Knobel and Seth Warshavsky are likely to appear on this board? NOT

Originally Posted by Hugh Chmabers

http://www.the-scream.co.uk/forums/s...0&postcount=32

What about Richard Green and Marilyn Shein, Hugh?
http://www.independent.co.uk/news/bu...be-684471.html

and who did say

George kidd the dirty old bugger

it was Craig Gardiner, not Hugh Chambers. Old friends with similar moral standards.

"Dial M for Madagascar"
http://www.theregister.co.uk/2000/11...ipoff_uk_porn/
(ukpage3-->cathybarry-->netcollex dialler in 2001, Coulomb in 2002)
"All you need is a small dialler
CLICK HERE to download........
with it you can connect direct to my members section for unlimited viewing, all you will be charged for is your phone call."

[Hamlet]

horsewhip!
where is Mirror Investigative? Go and get them - and take the horsewhip with you.

Originally Posted by Hamlet

They've horse whipped Kevin, but not Hugh
http://blogs.mirror.co.uk/investigat...if-i.html#more

[kevinswayne]

Hello El Gringo and Hello again Hamlet...

My name is Kevin Swayne and I am the Chairman at Transact Group.

As stated in my previous post in relation to other matters being discussed in this forum about Transact Group I am not aware of your true identities and consider I have no need to hide behind any nickname nor addy within this forum and happy to be transparent.

On reading this thread I can clearly see you have been very busy Gentlemen.....So let me correct the points and maybe fill in the gaps for you so you have the full and correct version as this is a public forum.

Lets start with El Gringos post of the 12th November and the coverage of the PPP findings in the adjudication dated 29th October 2009.

It is noted that this post is a regurgitation of the adjudication by PPP in relation to alleged breaches of the code by Transact Group and as published on their website in the adjudications section. The findings were made following a CCP hearing of 30mins and were based on information provided to them by the PPP Executive which led them to this make this descision at this point.

Following their announcement Transact filed an immediate appeal based on the CCP's descision as it believed the finding and the information provided that led to their final descision to be materially incorrect.

The process of appealing matters with PPP is in our, and many others opinion a very unfair and materially prohibitive one but nonetheless when you consider the findings are wrong then you must appeal and overcome all obstacles put before you to prevent you from doing that.

Its a regretable fact that the process they enjoy permits findings made by themselves to be publicly published at various stages of their own process (regardless of their factual accuracy) . I am however sure this is something that will in the future have to be addressed due to the damage caused by such actions should the information is subsequently borne to not be correct.

For the sake of correctness in this thread I can advise you all that this case remains in the appeal process that we are obliged to follow. Transact is resolute on the matters where it feels injustice has been served and where information quality has been incorrect or misleadiung and where publication of said information is subsequently made then redress should follow.

This is far from over...

OK Hamlet your turn now - Let me sort out the questions and some of the misgivings in your 12th November posting so we get that correct & not all confused.

BluVu.tv is a web tv product and if you put a www. in front of it it will take you to the website it refers to. Personally i think its a great product that we're very proud of and above all its been very sucessful.

Now lets deal with the names you mention in realtion to it.

Stuart Wilmott is a old friend and business collegue of mine. He is an extremely sucessful photographic agent and content owner. He provides contnent and content agreements for this product but has no corporate interest in the comapny.

Aubrey Welch - The streaming technology engineer who provided some of the tech needed to achieve the broadcast elements of the product. Aubrey is a top man in his field and I can highly recommend him. He worked with the company on a contract basis for a contract term ands left when his work was completed.

Angela Norrie - Angela was the partner account manager and managed the relations beetween the content providers and Bluvu. Angela has subsequently left the company to pursue another career and we wish her well.

Andy Middleton - He was the Transact Group Chief Operating Officer for 5 years and BluVu as a Group company was under his managerial remit at the time. I can also assure you he has no connection to Middleton Holdings whatsoever so thats sorted that out !!

Hugh Chambers - I have known Hugh for over 20 years now having first met when he was in HK. When he recently returned to the UK he agreed to come and assist us for a term to set up the this company to release and its manage some commercial relationships. He stayed with the company for around 6mths and having completed his task he moved on.

Kate Blu - Not a clue who she is !!

I hope that now clears up your unanswered questions on Bluvu or any queries you had.

I cannot add much to your post on Interoute and GIB as I'm afraid it had nothing to do with Transact or any other associated company of mine. I will have to accept your finding on this as stated but i am not sure by doing so what you are attempting to establish !! Probably was content for a seperate thread really but i suppose there was a remotre link wit Hugh and can see what you were thinking.

Interestingly however, Transact did not enter the dialer market at all. In fact in 1999 we made a formal presentation to ICSTIS in a hotel suite in London and then again at their offices on the matter.

We recommended the manner in which dialers should be technically competent via secure download to avoid fraud and how when content connected to PRS numbers should be managed by proxy to avoid ilegal content or hyperlink breakout. We presented a paper on this along with a recomendation on how to avoid inevitable problems and further advised that not considering or adopting this policy would lead to problems.

We even suggested it run on a seperate number range with pre logged URL's to PRS Numbers.....

ICSTIS rejected this proposal as complex technology and said our proposition would be too prohibative on companies without access to secure technology asserting we were setting the bar to high for a competitive market.

We took the view that this was a high risk descision on their part and withdrew our secure dialer from the market before the inevitable happened as we did not wish to be associated !!

Ironically in 2004 when the world collapsed under dialer madness, ICSTIS must of finally managed to find the document presented to them in 1999 and ironically adopted most if not all of the recomendations we had made to them 5 years earlier claiming a sucess in stopping the fraud.

In my opinion this was more like a failure in 1999 not a sucess in 2004 and another good technology wasted through poor understanding !!!!

Now Hamlet - Thank you for recommending the Mirror to Horsewhip and didnt they just !! - Watch this space on that one .... more to come..... and its my turn next with the whip !! Cant wait,

Ohhh Silent Genius - You seem inteligent man and make a very inteligent observation but then do any of us really not know why this occurs ?? I think Mum's the word on this one and "the Old Boys" Club maybe isnt where you think it is... A very warm welcome Mr Cameron now lets get busy but in the meantime ssshhhhhhhhh.

Hamet - 13th November one. Shall we add some balance and perspective to this one. I have been in this industry for over 21yrs now and i have handled millions and millions of calls across many continents and many cultures. I was one of the founding pioneers in the UK market in the late nineties and am proud to be one of the forefathers of the indusry you now enjoy to comment on.

I was even there there the day we wrote the first code - Where were you at that time ??

To add some balance to your post, over the last 20+ years Transact Group including all subsidaries & sister companies have attracted a grand total of just 8 adjudications and proir to the issue in 2009 have never been fined more than £15k. Furthermore we have sat in the same office in the same place on the same telphone numbers throughout this entire time so hardly hiding are we ??

Proir to October 2009 our entire consumer complaint history over 21 years had produced a grand total of 193 consumer complaints againsts hundreds of millions of calls completed and many happy returning customers. Not bad at all really and a record I'm sure if you look further into the database of PPP you will find is somewhat good in comparrison.

Its one Mr O'Leary would envy i'm sure..

I dont mind critisism but with the bench mark of "no complaints" being the accpetable level i fear i will, and so will many others fail to live up to that expectation. I liken it to Commercial Catholisism but maybe thats the point we're missing here.. Keep passing the plate...

Finally Hamet on the 3rd December post - They did horsewhip yes.....but was it right, was it fair but above all was it correct ??

Keep well Gentlemen and hope this clears up a few matters for you. Anything else I can be of assistance with please let me know - maybe its a pity we didnt speak earlier as it probably would of saved a few sleepless night or allowed you a life even !!

You know where I am and happy to buy the beers if you want to pop out from behind the addys...Mail me for an invite...








.

[Hamlet]

Thank you, Kevin. I really appreciate your comments...

First of all I want to tell you why I started "investigating" the PR business (I guess most of us could tell a similar story):
I was completely unaware of Premium Rate Services or diallers in 2003. I had a broadband connection and a handful of "security programmes", ad blockers, and so on.
Within a few weeks three relatives and friends asked for help because of horrific phone bills. Asking more friends I found out that many of them had to pay bills which they did not understand. I never was a victim of PR fraud but I noticed that PR fraud was and is tolerated by the politicians, by the regulators and by the industry. This cannot be accepted.
That's the one and only reason for any investigation.
I have edited most of the rest of my answer and send it as a Private Message

My name is Kevin Swayne [...] I am not aware of your true identities

Originally Posted by kevinswayne

I understand that this is an unbalance, but I was threatened by an industry member in the first week of my investigations and I am very glad that I have some friends that do most of the communication with the industry so that I can remain anonymous. But I never did abuse my anonymity to do something illegal or unfair (e.g. I did never libel anyone against my best knowledge).
I hate writing "bad things" like allegations about a person or a company that turn out to be wrong, it's making me sick... But I know that it's happening from time to time. It's a "collateral damage" of investigating in a grey market area. These things can be solved when there is a sort of "understanding" or "sympathy" on the side of the companies: In general it must be in your interest to proscribe the fraudsters within your industry. You did not write anything about that "understanding", but it can be seen between your lines.

So let me correct the points and maybe fill in the gaps for you so you have the full and correct version as this is a public forum.

Yes. And we never would have the chance to get such information without writing about these things. In the end this can be a win-win-situation.

Lets start with El Gringos post of the 12th November and the coverage of the PPP findings in the adjudication dated 29th October 2009.[...]

Maybe El Gringo will answer. I would have to study the background again coz I do not remember it as exactly as it would be necessary to talk about it (oh dear, can anyone understand this?)
It's - in any case - interesting to read your words even without having all details down pat.

[...]

You know where I am and happy to buy the beers if you want to pop out from behind the addys...Mail me for an invite...

Is there an Octoberfest Gathering this year?

[Hamlet]

[by the way]
Oh Dear!
http://www.the-scream.co.uk/forums/s...21&postcount=4

"The Tribunal considered that the Service Provider – Transact (Holdings) Ltd – was a new company and, as such, had no breach history. However, the Tribunal noted the breach history of Transact Group Limited, which had the same directors as the Service Provider and had been involved in similar services over this period. The Tribunal considered that, in these circumstances, it was reasonable to take this into account as an aggravating factor. "
I have completely misunderstood this... I just stopped reading after the red part. Or stopped thinking. Or stopped both.

[kevinswayne]

Hamet -

I thank you for your openness appreciate your initial reasons why this has become an issue for you and I am sorry to hear this.

I think its important to say not all are as you may assume although i appreciate its sometimes easy to get into a mindset as a result of ones experiences, but then said, maybe some balance sometimes makes for a more rewarding outcome and a more respected arena of discussion to a wider audience.


The reason i entered this forum was in response to assumption majorly driving the posts and like most people if i am to read comment on either myself or my company then i would prefer it to be a factual or correct one.

Without misguided connections maybe others will now feel more inclined to follow - lets see!!

To close on this post - I thank you for your comment regarding the TGL & TGHL matter. I assume now you have read the original full posting I assume there is no more clarity needed beyond what i stated in my post dated 29th June.

It is however, yet to be established why this was viewed as an agrivating factor especially considering the particular circumstances surrouding this adjudication (that this remains under appeal). We however, are not afforded the luxuury of the "Public Pedastel" the regulator enjoys through which to voice its opinions as it see's desires on the way so i guess we will just have to wait for our turn further down the line.

[Hamlet]

So you define yourself as a "good apple". Nice. It is not impossible that I have some questions about this or that later on and I hope that we always find a good basis for discussions, just like we did here.

Best wishes
Hamlet

(by the way: To me the story mentioned in the first posting by El Gringo still is reason enough to keep THL "on watch", but next time we will discuss things directly, if necessary. That may save our (virtual) breath )

[El Gringo]

this post is a regurgitation of the adjudication by PPP

Originally Posted by kevinswayne

hi Kevin,
I've just noticed this. Is it possible you may have misunderstood the original post and the reason I started this thread.
http://www.the-scream.co.uk/forums/s...13&postcount=1

If you look you will notice I took selected parts of the adjudication in order to show that Phonepayplus certainly believed consumer harm was taking place and despite this they apparently allowed it to continue for at least five months.

While PPP were monitoring(investigating?) they would not have known if the harm was intentional or as you claimed largely down to a technical problem.

Have you any idea why they did not act earlier to at least limit the harm?

[kevinswayne]

Hi El Gringo

I appreciate you clarifying the purpose of your original post and the answer to your question regarding time and reason why is the very basis of our appeal in this instance.

Due to ongoing proceedings with PPP I trust you appreciate i cannot elaoborate more as this may prejudice our position but all I am sure will become clear in due course one way or another.....!!