Two firms found to have used typosquatting domains to lure consumers to misleading web competitions have each been hit with unprecedented £100,000 fines, the UK industry watchdog has announced.
Premium rate regulator PhonepayPlus ruled that Dutch-based companies R&D Media Europe and Unavalley BV were guilty of running a premium rate racket in which consumers were invited to enter SMS-based competitions for the chance to win prizes including Apple iPads.
Unfortunately, in order to enter visitors had to supply their mobile numbers in order to receive a competition PIN, after which they were charged £1.50 for each question received and each answer given without the charges being explained in advance.
In addition to breaking the premium rate phone services code of practice, the companies impersonated popular domains such as Twitter, YouTube and Wikipedia using typosquatted domains - 'wikapedia.com' and 'twtter.com being examples - with visuals that made them look almost identical to the real websites.
One consumer complained that his fiancée had been tricked into paying £63 to enter a competition she thought was connected to YouTube, the regulator said.
In addition to the £100,000 fines, each company was ordered to refund consumers of money taking during the misleading competitions.
“These judgements send a clear message to providers that they cannot play on the public’s trust in well-known websites to promote services,” said PhonepayPlus chief executive, Paul Whiteing.
“We want consumers to continue to have confidence in the digital market place and we will do everything we can to ensure that they do. Most providers support us in this area as they recognise that this market will only grow if consumers have such trust.”
PhonepayPlus introduced it 12th code of practice in 2011 after extensive consultation with the industry, which for the first time required that all premium rate providers register with the watchdog.
The premium rate phone industry is controversial at the best of times but typosquatting was probably the final staw in these cases.
In December, Websense warned UK consumers to beware using sites that employ typosquatting techniques as part of a wider sales deceptions.