Original URL: http://www.theregister.co.uk/2007/09/26/gmtv_2m_fine/
TV firm takes £2m hit for competition line scandal
Should have been watching the Opera
Ofcom has fined GMTV £2m for failing to check up on its service provider, Opera Telecom, and thus allowing the public to get ripped off by an early winner selection scandal.
There's no suggestion that GMTV asked Opera to break the rules, or had much of an idea what was going on. Where dubious behaviour was suspected it was immediately stopped, and Opera had assured GMTV that everything was above board.
As a premium-rate provider Opera is regulated by ICSTIS, which on Monday issued a maximum fine of £250,000 to the firm for its part in the business.
Leaving everything in the hands of the service provider is not acceptable, according to Ofcom, which said in its ruling (pdf):
The committee was particularly concerned by the [GMTV]’s admission that despite the considerable financial importance of these competitions to GMTV (representing as they did 35-40 per cent of its annual profit), there was no audit of Opera’s processes and procedures by GMTV’s management or its board... It did not take adequate account of the possibility that Opera, as a third party, might fail to act in an appropriate manner when taking such substantial sums of money from GMTV’s audience.
Since the details became public, GMTV has been trying to make amends. Its MD and head of competitions have taken a bullet, it's offering refunds to 25 million entries and promoting them daily on TV, and holding 150 free prize draws for those who entered the original competitions but couldn't have won. It is also throwing quarter of a million to Childline for good measure.
The Ofcom committee noted all this, and said the fine would have been a lot more without GMTV's efforts - but it still wants its £2m, and details of the ruling to be broadcast three times on GMTV. ®