ICSTIS Guideline No. 1

Competition Legality (Version 1: 9 March 1998)

Introduction

ICSTIS Guidelines are intended to advise the premium rate services industry on how the Committee interprets or applies provisions in the ICSTIS Codes of Practice. Service providers seeking clarity about the application of any Code provision in a particular case, or when a new service is being developed, are strongly advised to contact the Secretariat before starting to operate the service.

A current list of all the latest versions of ICSTIS Guidelines appears in the current ICSTIS Monthly Report and on the ICSTIS website. Copies of Guidelines are available, free of charge, from the Secretariat.

The legality of premium rate competition services

 It is a breach of the ICSTIS Code to provide a service that is illegal. The legality of certain premium rate competition formats is a matter of some concern. The Committee considers that there are substantial grey areas in the law relating to lotteries and competitions and that ICSTIS is not the appropriate forum for deciding the complex questions of law which could arise in many cases.

ICSTIS considers, however, that it may assist service providers if it were to lay down certain policy guidelines in relation to action it might take in this area if there is no doubt about legality and potential serious harm:


1
If ICSTIS is given clear expert legal advice that a service appears to be plainly illegal and, considers that a service has or is causing serious consumer harm it will put a breach of the Code to the service provider. If, following the response, ICSTIS receives further advice to the effect that there remains no doubt that the service is illegal, it will proceed to adjudicate in accordance with the Code.
2 If ICSTIS considers a breach to be serious but receives expert legal advice which indicates that there is uncertainty whether the service is in breach of the law or not, ICSTIS will not proceed under its Code.
3 ICSTIS will, in any event, refer such cases to the police.
4 The following is a list of factors which will be taken into account when the Committee is assessing the consumer harm caused or potentially caused by a particular competition service:

Many service providers obtain legal advice before providing these services and try hard to avoid running illegal services. To help service providers the following would be expected to apply in the absence of fraud or other substantial abuse.

ICSTIS will not take action (even if the service might otherwise appear to be a lottery or an unlawful prize competition) if:


1 calls to the service cost the same as or less than a first class stamp; or,
2 there is a prominent alternative entry process (not one which appears only in small print among 'rules of entry').