REPORT NO.56


MINISTER BACKS NEW ICSTIS CODE OF PRACTICE

The eighth edition of the ICSTIS Code of Practice, which comes into force today, has received the backing of the Government. In a press statement issued today by the Department of Trade and Industry, Minister for Small Firms Barbara Roche welcomes the Code and acknowledges ICSTIS as an “excellent example of industry self-regulation working”.

In announcing the Government’s support for the new Code of Practice, Mrs Roche says:

“I am encouraged by the content of the new Code. It has been produced following extensive consultation with consumers and the industry and balances the need to maintain high levels of protection for consumers while at the same time allowing the pace of development of the industry to continue.

“Increasing liberalisation and competition has led to the entrance of new network operators to the premium rate services market with new technology for delivering services. I know the new Code of Practice will help ICSTIS to ensure that regulation keeps pace with these changes in the market.

“In a system of self-regulation, standards can only be applied effectively if they have the commitment and support of all. ICSTIS is an excellent example of industry self-regulation working. However, the industry must maintain its commitment to, and support for, this system in order to ensure adequate consumer protection and safeguard public confidence in self-regulation.”


‘FUNNY FAX’ FIRM BANNED

ICSTIS has banned a company whose series of ‘funny faxes’ was found to have caused grave and widespread offence. The company was also found to have failed to ensure that its faxes did not reach an inappropriate audience.

The ban on Fax Data Services Ltd, of Wimpole Street, London W1, prevents it from operating any premium rate service for one year. In addition, the company and its directors are required to give assurances to ICSTIS that they will not operate any premium rate service in the future which, in any way, breaches the ICSTIS Code of Practice.

ICSTIS received almost 350 complaints – including ones from a hospice, a leading charity and several schools – about the company’s various £1.00 per minute promotional faxes which were sent, unsolicited, to offices and people’s homes, often in the middle of the night.

The vast majority of complaints concerned the offensive and obscene nature of the faxes, the titles of whichincluded All About Sex, Lunchtime Menu (Suc Mi Pogoda), The Poo Guide, Toilet Talk and You Know You Need A Shag When….

“We regard the breaches as very serious,” says ICSTIS Director Sarah Harrison. “A great deal of advice was given to Fax Data Services to enable them to comply with the Code of Practice but this advice was not heeded. Although compliance with the ICSTIS Code of Practice is generally very good, we will continue to take tough action to safeguard consumers against those companies who breach the Code.”

Fax Data Services Ltd was fined £1,000 in July 1997 for distributing similarly offensive faxes.


SEMINAR ON THE FUTURE OF PREMIUM RATE REGULATION

The ICSTIS Industry Committee (IIC) is hosting a seminar on Thursday 26 March 1998.

The event aims to consider and review the principles, operation and future role of regulation to ensure it continues to be applicable, flexible and effective. This will be considered within the context of ensuring users of premium rate services are adequately protected while, at the same time, enabling industry development to continue.

The seminar will be chaired by Ian Taylor MBE MP, former Parliamentary Under-Secretary of State for Science and Technology. Don Cruickshank, Director General of Telecommunications, will be giving the keynote speech.

The seminar will be held at:

The Radisson SAS Portman Hotel
22 Portman Square, London W1
(Tel: 0171 486 5844)

Delegates are invited to a pre-seminar dinner at the above venue on the evening of Wednesday 25 March. The attendance fee for both the seminar and dinner will be £75.00. The fee for attendance at the seminar only will be £50.00.

For further information on the seminar itself, please contact Natalie Cole at the ICSTIS Secretariat on 0171 240 5511.

For information, the industry representatives on the IIC are:

Gordon Brechin (Cable & Wireless)
Tel: 0171 528 1935
Trevor Cook (Vodafone Value Added Services)
Tel: 01635 33251
Helen Jacobs (BT)
Tel: 0181 666 2384

Suzanne Gillies (Premium Rate Association)
Tel: 0171 631 4321
Siegfried Kirsten (TDSA)
Tel: 0181 742 2299
Mike Tully (DMA)
Tel: 0171 321 2525


HIGHER TARIFF SERVICES TO GO ON TRIAL

The higher tariff of £1.50 per minute was introduced in September 1994 and was initially made available for business and professional services only. As a consumer protection measure, companies wishing to operate services at the higher tariff have had to apply to ICSTIS for prior permission. To date, permission has been granted to over 500 services and the higher tariff has become an established part of the premium rate industry, with the number and nature of complaints not causing serious concern.

In response to this relatively trouble-free environment, ICSTIS has been consulting upon a relaxation of the rules relating to higher tariff services.

Such a move would enable ICSTIS to concentrate its attention on those types of higher tariff service most likely to cause consumer harm. It would also enable ICSTIS to address industry concerns about the length of time the permissions process takes in what is an increasingly competitive market.

As part of the consultation, ICSTIS has proposed that a controlled trial takes place. This would start in May and run for nine months, with a full review carried out after six months.

Under the terms of the trial, those companies offering automated information services would simply need to register their service with ICSTIS. Those companies offering services not currently allowed at the higher tariff – such as live entertainment services, competitions and tarot lines – would need to apply for permission in the usual manner and ICSTIS might choose to impose additional conditions if permission was granted.

To ensure that the trial can be monitored and evaluated effectively, the number of participants would be strictly limited. A maximum of 70 service providers – 40 offering information services and 30 offering entertainment services – would take part, with each service provider only being allowed to register one higher tariff service each.

Companies taking part in the trial would also need to obtain a written endorsement for their services from their network operators. In addition, ICSTIS would want network operators to assist with data to evaluate the trial. This could include information about billing disputes, bad debt and complaints received about each service.

For further information about the consultation, or for details of the proposed trial, contact Judith Oliver at the ICSTIS Secretariat on 0171 240 5511.


Cases of Substance

Service Provider
Contracts Broadcast Systems, Norwich

Service Type
Fax

Complaint Source
Trading Standards,
Bournemouth, Middlesborough
Public, Sussex

Complaint
Two trading standards officers and one member of the public contacted the Secretariat in order to find out more about the ‘Local Authorities and public sector select list register’, which was being promoted via unsolicited faxes (5.4.1). Businesses were receiving faxes inviting them to fax their entry (via a premium rate number) into a directory to which “thousands” of buyers in local authorities and the public sector would refer when placing orders as a result of compulsory competitive tendering. The complainants felt that the unsolicited faxes implied that the directory was an official list when, in fact, it did not appear to be one. In addition, the sending of the faxes appeared to be unreasonably delayed, taking several minutes to transmit one page (2.1.2).

Investigation and Decision
Contracts Broadcast Systems supplied information to show that they were sending letters to local authority buyers advertising use of their ‘select register’ via a national rate pin code system. They claimed that they had over 3,000 businesses on their list from which buyers could choose once they knew the names and pin codes of the companies in which they were interested.

Contracts Broadcast Systems claimed that the service was not deliberately delayed. They explained that the delay might have been caused by the fact that the faxes were routed directly into their computer system and would therefore need to be formatted, or because of the demands placed on the system at peak business periods.

The Committee originally requested further information from the service provider about the database, the material that a user of the database would be supplied with and details of who had been contacted. However, Contracts Broadcast Systems only supplied a circular letter to show how local authority buyers could find out about particular companies and examples of three companies from whom they had obtained details.

The Committee upheld breaches of paragraphs 5.4.1 and 2.1.2. In addition, a fine of £500 was imposed and access to the service was barred.


Service Provider
Dostana Communications Ltd, Manchester

Service Type
Virtual chat

Complaint Source
Public, Jersey

Complaint
A member of the public complained that a misleading pricing message had been added to a £1.00/minute service. The message stated that calls to the service would cost ‘25p/minute cheap rate and 39p/minute at all other times’ (1.4.1, 3.3.1).

Investigation and Decision
Dostana Communications Ltd replied that the number had been ‘data filled’ incorrectly by their network operator, with the result that an old message for a previous virtual chat service had been given. The network operator concerned confirmed this to ICSTIS.

The Committee upheld breaches of paragraphs 1.4.1 and 3.3.1, but did not impose a sanction as the breaches had occurred as a result of a technical fault.


Service Provider
European Construction Consultants, Hertfordshire

Service Type
Employment

Complaint Source
ICSTIS

Complaint
An advertisement in the Daily Star for an employment service, operating on the higher tariff, did not include pricing or address information (3.3.1, 3.2.2). The advertisement simply stated, “All trades required for contracts starting in the New Year”, and did not therefore appear to comply with the permission certificate granted by ICSTIS or the ICSTIS Code of Practice. The advertisement did not include details of the geographical location of the work supplied, any additional expenditure over and above the costs of the call, the type of work and the number of workers required (1.6.1, 4.6.2, 4.6.3, 4.6.4).

Investigation and Decision
The Secretariat contacted three Committee members according to ICSTIS’ ‘emergency procedure’ and access was temporarily barred to the service pending an investigation. In the meantime, the Secretariat contacted European Construction Consultants, who produced information to show that there were genuine vacancies available.

The Committee upheld breaches of paragraphs 1.6.1, 3.3.1, 3.2.2, 4.6.3 and 4.6.4 but did not uphold a breach of paragraph 4.6.2 as genuine vacancies were available. As a result, the Committee decided not to revoke its permission for the service and allowed reconnection of the service to take place. However, the service provider has been given a warning that similar breaches in the future may result in permission being revoked. In addition, all promotional material connected with the service for the next six months must be pre-vetted by the Secretariat.


Service Provider
Global Communications Ltd, Cambridge

Service Type
Adult entertainment

Complaint Source
Public, Bristol

Complaint
A member of the public complained that advertisements in a contact magazine for services operated by Global Communications Ltd did not contain pricing information and were inappropriate for the publication, as the messages involved the use of foul language (3.3.1, 4.8.4, 1.3.4). In addition, the service appeared to be delayed and misleading as it repeatedly claimed to be an international service (2.1.2, 1.4.1).

Investigation and Decision
Global Communications Ltd explained that the lack of pricing information was due to an error by the publisher and supplied a letter from the publisher to verify this. They claimed that the contact magazine was an adult publication, which could only be found in specialist shops, and that the language used in the messages should therefore be viewed within the context of the promotional medium.

Global Communications Ltd disputed that the service was unreasonably delayed. They also claimed that it was not misleading for the service to indicate that it was an international service as it had been produced to an international standard.

The Committee upheld breaches of paragraphs 1.4.1, 2.1.2 and 3.3.1 but did not uphold breaches of paragraphs 1.3.4 and 4.8.4. In addition, a fine of £500 was imposed.


Service Provider
JJM The Picture Framers, Coventry

Service Type
Information

Complaint Source
Public,
Coventry and Worcester

Complaint
A member of the public who received a broken mirror from JJM The Picture Framers was referred to a higher tariff premium rate number to make a complaint, without being informed of the costs involved. In addition, on connection the operator did not provide any call charge information (1.6.2).

Another member of the public complained about an advertisement from the service provider in which the small print stated that callers could obtain “free” prints of Leicester City Football Club, when the only way of obtaining them was to call the premium rate number (1.4.4).

As JJM The Picture Framers had only been given permission to operate their service as a mirror order line, it appeared that they were operating outside the terms of their permission certificate (1.6.1).

Investigation and Decision
JJM The Picture Framers replied that they had ceased using the word “free” in their advertisements and supplied new examples of their advertisements to verify this. They have now included a short introductory message clearly stating the cost of the call at the beginning of the service so that future callers would always be aware of the call charges.

The Committee upheld breaches of paragraphs 1.4.4, 1.6.1 and 1.6.2. No sanction was imposed because the service provider worked quickly to amend the breaches. However, it has been made clear to JJM The Picture Framers that they must operate their service strictly according to the conditions stated in their permission certificate.


Service Provider
Keyline Associates Ltd, Manchester

Service Type
Fax

Complaint Source
Public, Sussex

Complaint
A member of the public complained that they had received an unsolicited fax in which the only legible sentence asked for information to be faxed back on a premium rate number. The fax did not contain any pricing or address information, or any other useful information relating to the operation of the service. (1.4.1, 3.3.1, 3.2.2).

Investigation and decision
Keyline Associates Ltd did not respond themselves but asked their information provider, SK Marketing of Bournemouth, to reply directly on their behalf. SK Marketing explained that they were operating a data capture service and it was only because of a technical fault with their fax machine that the relevant information was illegible on the bottom of the fax.

The Committee upheld breaches of paragraphs 1.4.1, 3.3.1 and 3.2.2. A sanction was not imposed because the breaches did not appear to be deliberate. However, Keyline Associates Ltd have been reminded that, as they are the service provider, they are responsible for the actions of their information providers under the ICSTIS Code of Practice.


Service Provider
KPM, Sidcup

Service Type
One virtual chat/
two adult entertainment

Complaint Source
Public, London

Complaint
A member of the public complained that two recorded services, run by KPM and advertised in the Daily Sport, contained material of a sexual nature (4.8.4). In addition, a virtual chat service, also advertised in the Daily Sport, appeared to be operating in a technically incorrect way (2.1.6). On several occasions, a message was sent by a caller named ‘Chloe’ who had apparently left the service some time earlier as, each time a reply was attempted, the system responded with, “…this caller has left the line”.

Investigation and Decision
KPM apologised for the breaches that had occurred. They claimed that they had thought the Daily Sport to be a top-shelf publication and explained that, as a consequence, they would no longer advertise adult services in it. They also explained that they had had technical problems with their virtual chat service, which had led to some callers’ messages being found on line after the callers had left the service.

The Committee upheld breaches of paragraphs 4.8.4 and 2.1.6. The Committee did not impose a sanction on the basis that KPM would discontinue advertising the services in the Daily and Sunday Sport and resolve the technical problems on the virtual chat service.


Service Provider
Party On Ltd, Bradford

Service Type
Virtual chat

Complaint Source
Intra-industry

Complaint
A service provider complained that a caller was asking other callers on a virtual chat service to call an ordinary STD number. The message on that number advertised Party On Ltd’s ‘open house’ service, which costs one pence/minute and is only available on Saturday afternoons and Sunday mornings. The message went on to suggest that callers should contact another (premium rate) number at other times. No pricing information was given at this stage and the complainant felt that some callers might believe they were calling a service charged at one pence/minute. (1.4.1, 3.3.1).

Investigation and Decision
Party On Ltd accepted that the breaches of the Code had taken place but explained that they had occurred inadvertently. They immediately placed a pricing message on the STD number. They also explained that the message on the STD number referring callers to the premium rate number should only be promoted to members of the ‘Party On’ service, who would already know the cost of the call.

The Committee upheld breaches of paragraphs 1.4.1 and 3.3.1 but did not impose a sanction as Party On Ltd had acted quickly to amend the breaches. Although the breaches did not appear to be wilful, the service provider was warned that future similar breaches would be viewed more seriously.


Service Provider
Phoenix Telecom,
Horsham

Service Type
Live information

Complaint Source
Public, nationwide

Complaint
Several members of the public complained that they had telephoned a motorcycle spare parts service called ‘Price Parts’ but had not received any information even though an advertisement for the service had guaranteed finding a part within 12 hours of being contacted (5.3.1 Live Code). One member of the public also complained that the advertisement did not include the address of the company responsible for the service (3.1c Live Code).

In addition, the service provider did not appear to have permission to operate a live service and the operator did not provide callers with the required pricing information on connection to the service (1.4, 2.3 Live Code)

Investigation and Decision
Phoenix Telecom explained that the service was not run by them but by a separate information provider. They also explained that they did not have the facilities to monitor all the services run by their information providers so they had decided to end this particular working relationship.

The information provider explained, independently, that, although it was not strictly correct to state that they could “guarantee” to find any part within a 12 hour period, it was likely that they could find most parts.

The Committee upheld breaches of paragraphs 1.4, 2.3, 3.1c and 5.3.1 of the Live Conversation Services Code of Practice. The minimum fine of £300 was imposed because the breaches were the fault of the information provider and Phoenix Telecom had shown a willingness to comply with the Codes of Practice.


Service Provider
Planet Telecom plc,
Bolton

Service Type
Fax

Complaint Source
Public, nationwide

Complaint
Three members of the public complained about a fax asking recipients to vote on the “correct” verdict in the Louise Woodward trial. The number given for the return of votes was a higher tariff number and the service provider had not been given permission to operate a higher tariff service in this way (1.6.1).

Investigation and Decision
As the number was not being used for the purpose for which permission had been granted, the Secretariat instigated the ‘emergency procedure’, under which access to the service was barred pending an investigation. On contacting Planet Telecom plc, the Secretariat was told that the number had been used in error for a “straw poll” of 300 faxes. The service provider’s intention was to use a £1.00/minute number which would not have required prior permission.

After receiving Planet Telecom plc’s response and an assurance that no more faxes containing the higher tariff number would be sent out, the Committee decided not to bar access to the service. However, the Committee upheld a breach of paragraph 1.6.1 and imposed a fine of £1,000.


Service Provider
Sound Advertising Ltd, London

Service Type
Virtual chat

Complaint Source
Intra-industry

Complaint
A service provider complained that an advertisement for a virtual chat service, operated by Sound Advertising Ltd and promoted in Exchange & Mart, was of a sexually titillating nature (4.8.4).

Investigation and decision
Sound Advertising Ltd claimed that the advertisement was no more “racy” than similar services advertised in Exchange & Mart and denied that it was of a sexual nature. However, they voluntarily removed the advertisement from all publications.

The Committee upheld a breach of paragraph 4.8.4. A sanction was not imposed but a warning has been given to Sound Advertising Ltd that a similar breach in the future would be viewed more seriously.


Service Provider
Telemedia Technologies Ltd, Bradford

Service Type
Virtual chat

Complaint Source
Intra-industry

Complaint
A service provider complained that a caller was promoting a virtual chat service operated by Telemedia Technologies Ltd without informing callers of the cost of the call (3.3.1).

Investigation and Decision
Telemedia Technologies Ltd replied that they did not knowingly operate any services which were promoted without the required pricing information. However, they decided to undertake a thorough review of all their promotions in order to detect any omissions.

The Committee upheld a breach of paragraph 3.3.1 but did not impose a sanction as Telemedia Technologies Ltd had acted quickly to amend the breach. The service provider has been warned that a similar breach in the future would be viewed more seriously.


Fax Data Services Limited – “Funny Faxes”
Tel: 0896 200 702/703/706/708/
709/713/722/747/750/760/770


Final Adjudication

This matter concerned numerous promotional faxes described by the service provider as “Funny Fax” under various titles, such as:

“Top 20 Reasons Why Chocolate Is Better Than Sex”
“The Poo Guide”
“Grand Farting Competition”
“You Know You Need A Shag When....”

It was put to the service provider, in correspondence from 19 December, that a number of these faxes were in breach of paragraphs 3.1.2 of the ICSTIS Code of Practice (“the Code”) which provides that:

“Services providers should take all reasonable steps to ensure that promotional material does not reach those for whom the service concerned may be inappropriate.”

and paragraph 1.3.3 (a) of the Code:

“Services and promotional material must not be of a kind that are likely to:
(a) cause grave or widespread offence, or...”

Eleven such faxes formed the basis of the alleged breaches of the Code. One of those, “New EC Regulations”, was not pursued as being in breach of the Code. The faxes alleged in breach were added to by ten further faxes which were similar in nature and about which further complaints were received between the initial breach letter of 19 December 1997 and our hearing. One of those, entitled “Lunchtime Menu”, was dealt with under the Emergency Procedure set out in the Code.

We were provided, prior to the hearing, with a bundle of papers running to some 430 pages which contained the correspondence with the service provider in respect of the breaches under consideration and all of the relevant faxes and complaints received up to late January 1998. In addition, the bundle contained the further faxes alleged similarly to be in breach and the complaints relating to those; details of a past breach of paragraph 3.1.2 by the service provider in relation to faxes of a similar nature; a chronological bundle containing all correspondence between the service provider and ICSTIS and notes of meetings; and finally notes concerning ICSTIS’ contacts with the Fax Preference Service (“FPS”) and the Direct Marketing Association (“DMA”).

There was also provided to us a copy of all correspondence between ICSTIS and the service provider, and ICSTIS’ solicitors and the service provider, running on from that contained in the bundle up to the date of the hearing.

The service provider indicated in correspondence that he would not attend the hearing and did not accept ICSTIS’ authority over him. Indeed, the service provider did not attend the hearing which was due to commence at 12.00 noon, Friday 6 February 1998 at Alton House in London WC1.

Mr Trotter of Messrs Bates Wells & Braithwaite, who was presenting the case on behalf of the ICSTIS Secretariat, referred us to the exchanges of correspondence with the service provider, and in the light of that requested that the hearing should, nevertheless, proceed in the absence of the service provider. We considered that correspondence and are satisfied that the service provider has had ample time and opportunity to prepare and take part in the process, but has determined that he will not do so. He has been warned by Mr Trotter that he could expect the proceedings to continue in his absence and we accede to Mr Trotter’s request that the hearing take place, despite the absence of the service provider.

Mr Trotter referred us to examples of complaints received by ICSTIS in respect of the various faxes. We set out below the numbers of specific pages to which we were referred for record purposes, although we have all read all of the complaints:

“Top 20 Reasons Why Chocolate is Better than Sex”, pages 15, 16, 17
“Girl Power Application Form”, pages 23, 24, 26
“The Poo Guide”, pages 29, 31, 33, 35, 52, 55
“Compulsory Performance Appraisal”, pages 62, 63
“Grand Farting Competition”, page 65
“Toilet Talk”, pages 71, 72, 73
“How to Kill an Eel”, pages 78, 79, 83
“Cinderella’s Christmas Ball”, pages 88, 89, 90
“All About Sex”, pages 93, 94, 103
“You Know You Need a Shag When....”, pages 118, 119, 120
“Scud Launcher”, page 142
“32 Guaranteed Chat-up Lines”, pages 14,7 148
“30 Things Not to Mention During Sex”, page 151
“Father Christmas”, pages 154, 155, 156
“Blond Jokes”, page 171
“Stun”, page 173
“Lunchtime Menu”, pages 178, 179, 180, 184

We were also referred to the “Mad Cow”, “Safe Fax” and “Fred West” faxes.

We were told that in total ICSTIS had received 346 complaints about “Funny Faxes” and the great majority of those were on the basis of people being considerably offended on the grounds of taste and decency rather than simply annoyed to receive an unsolicited fax. For instance, in respect of “The Poo Guide”, there were 93 complaints of which 75 were about the offensiveness of the service.

The complainants made plain, either in their telephone conversations with the person receiving the calls at ICSTIS, or in correspondence, just how very upset most of them were to receive these faxes. The word “obscene” was commonly used; faxes arrived in people’s homes; people did not wish to receive them at their offices either and were concerned that junior staff members might see them; another theme was that people believed that they should not have received these faxes unsolicited but that permission should be required before such things were sent. People choose their own words in making complaints and the depth of feeling behind some of these complaints is readily apparent. One complainant, for instance, saying that receiving the fax was “worse than receiving an obscene phone call”.

In our consideration of paragraph 3.1.2., we have to decide whether the service provider has taken “all reasonable steps to ensure that promotional material does not reach those for whom the service concerned may be inappropriate”. In this connection we have considered what steps the service provider has taken.

The service provider has stated in a number of documents that his promotions are targeted. Having examined the material that he has provided, it appears that the service provider’s case is that because promotional material only arrives through fax machines, it is in that way targeted, and fax machines are either in business places or held by responsible adults. However (although the service provider has not been very clear on the point), the service provider stated in a letter of 10 September 1997 (page 226) that a target list of recipients was not drawn up and nobody at any stage entered particular numbers knowingly. We understand this to mean that fax numbers were dialled randomly with no knowledge of who the recipient would be other than that recipient was in possession of a fax machine.

The material being sent over the fax machine is not the sort of material that anyone would reasonably expect to receive through the post. It is material that (entirely predictably) complainants did not wish to see arriving in their homes, or at their places of business, unsolicited. In the circumstances, the taking of reasonable steps in this context must entail either ensuring that the material only reaches those people who want to receive such material, or if that is not possible (and we can quite see that it is, in practice, very difficult to achieve), then faxes of such nature simply cannot be sent and will have to be replaced by, for instance, an unobjectionable fax, such as “Things to Ponder!!” (page 363).

As to the steps taken by the service provider, he thought it reasonable that people should receive these faxes and be removed from the list if they objected. In our view, the question of reasonableness should be an objective test. It is clear to anyone that this approach does not satisfy the test because people to whom the service will be inappropriate will be bound to have received the promotional material. We should perhaps add that the service provider requested people to call the FPS (and later itself) in order to be removed from the list of targets. It appears from a number of the complaints that some of the removal requests at least were not acted upon. Similarly, whilst the service provider assured ICSTIS that he was a founder member of the FPS, in fact it transpired (page 428) that the service provider obtained only an initial list from the Fax Preference Service and did not have a membership of a type which even enabled it to receive updates. Accordingly, if people asked the FPS to remove them in order that they should not receive this promotional material any longer, it would seem that the suppression list would not be sent to the service provider in any event as he did not have full membership.

With regard to the issue of faxes arriving in private homes, members of this Panel are aware that under figures provided by the Office of National Statistics, 94% of homes have telephones and 8% of homes with telephones have fax machines. This equates to around 2 million fax machines in private homes.

The level of distribution of these faxes is unclear, and although the service provider has been asked a number of times what the level of distribution has been, the information has not been provided. Figures produced by the service provider on one occasion (page 297) suggest a 2 million fax distribution. However, on another occasion (page 326), the service provider says that his total revenue is £250, which would indicate an unbelievably low response rate with such a distribution. We are left not knowing the level of distribution and finding ourselves unable to rely on statements made by the service provider.

However, it is plain from the complaints received that many private homes have received these faxes and it should have been obvious that many private homes would receive these faxes. Whilst we do not think it is reasonable that such faxes should arrive unrequested in the home or business premises, it is obviously all the more sensitive when such material arrives in homes. No steps taking this into account were taken by the service provider.

The next element of paragraph 3.2.1 to consider was whether the material reached those “for whom the service concerned may be inappropriate”.

The service concerned consists, according to its menu, of essentially the same sort of material as is represented by the promotional faxes. A service which is of such a nature is inappropriate for those who do not seek material better suited to the higher shelves. Perhaps the best indicator is that so many found the promotional material highly offensive.

We turn now to paragraph 1.3.3. With regard to whether or not the services and promotional material are “of a kind likely to cause grave or widespread offence” under paragraph 1.3.3, we refer again to the context of the complaints we have received. We have no doubt that the offence caused has been “grave” to many of the complainants. One only has to read the complaints where people describe the faxes as obscene or very offensive or in other similar language and we do not doubt that offence is deeply felt. As to the widespread nature of the offence, the level of complaints in this case is one of the highest that ICSTIS has ever encountered. Some of the complaints are on behalf of more than one complainant, but in any event the simple number of complaints is such that we have no hesitation is saying that widespread offence has been caused.

The service provider’s case (as Mr Trotter put it to us using the service provider’s letter of 6 January 1998 (page 126)), might be seen as fourfold:

(a) That it is up to ICSTIS to guide the service provider, and if ICSTIS has not done so the service provider can send out as promotional material or on services, whatever he likes (we call this the terms of reference argument). We deal with this below.(b) No marketing is 100% guaranteed and the marketing in this case is “focused” and not “blanket”. We have dealt with this point above.

(c) There is really no such thing as an inappropriate audience.

This point arises in connection with complaints received from the NSPCC and a hospice which had received offensive faxes.

This relates primarily to paragraph 3.1.2. We have explained above why we do not think reasonable steps were taken and we refer again to the need for service providers to identify prospective recipients who will be seriously offended and so for whom such material would be inappropriate, as would any service dealing with the same sort of material. We see nothing in this point.

(d) That a service is not inappropriate for someone who does not have to call it.

Again this relates to paragraph 3.1.2. Again there is really no point made. The people do not have to call the service and will not do so when it is clearly an inappropriate service for them. In these circumstances the promotional material for that service was also inappropriate and should not
be sent.

Turning to the terms of reference argument, it is that it is ICSTIS’s responsibility and not that of the service provider that breaches have occurred because ICSTIS has not provided guidance that the service provider says should have been provided and as it is allegedly obliged to do under the Code.

Turning to the Code, it is made plain in paragraph 7 in the ‘Introduction’ that service providers have responsibility for compliance with the Code.

The service provider refers to paragraph (d) of the terms of reference which reads as follows:

“ICSTIS undertakes the following tasks:

...(d) investigating and adjudicating upon complaints relating to the content and the promotion of premium rate services and recommending action designed to achieve compliance where the Code has been breached, which may include the imposition of sanctions; ...”

The service provider has picked out the words “and recommending action designed to achieve compliance” and, in effect, asks us to treat that as a stand alone provision. It is not a stand alone provision, it is part of a term of reference relating to ICSTIS’ powers upon the adjudication of a breach.

The ICSTIS Secretariat give advice and guidance in so far as they can within the constraints of the demands on their time. Their advice and guidance is not binding on the Committee. It has not been the case, and is not intended to be the case, and could not be the case, that the Secretariat has responsibility for every issue of taste and decency for every service should service providers choose to bring them to the Secretariat before transmission.

With regard to the guidance given to the service provider in this case, it is worthy of emphasis that the service provider underwent an ICSTIS breach process previously commencing with a breach letter of 7 July 1997 which was in respect of similarly offensive promotional fax material which was found to be in breach of paragraph 3.1.2. A fine of £1,000 was imposed and after a great deal of correspondence and a review, the fine was eventually paid on 27 October 1997 (page 262). Mr Smith of the service provider was met on two occasions by the Director of ICSTIS, an Assistant Director and a staff member on 29 September 1997 (page 326) and 24 October 1997 (page 345). We have seen the notes of those meetings and we have heard directly from Saru Balakrishnan, who was present at both meetings, just how plainly Mr Smith (for the service provider) was told that the faxes he was sending out were unacceptable because of their offensiveness. He was also told that it was not acceptable to fax out indiscriminately but would need to build his own list of recipients.
After the meeting in late October Mr Smith did request further advice about specific faxes (which, bar one, were plainly likely to be offensive) and did not receive a reply until 15 December. That reply is extremely full and clear. It is regrettable that the reply was delayed. However, following that reply the service provider has continued to send out offensive faxes, including in particular the “Chinese Menu” fax, which has been the subject of the Emergency Procedure.

The service provider has not disputed that the faxes complained about emanated from it. However, the service provider has said that ICSTIS should prove that the faxes came from it. We note that none of the complainants has said that they received the fax from some other source; the faxes do not have header details; the service provider did send out the faxes in substantial numbers (although we do not know how many). On the balance of probabilities we are satisfied that the faxes complained about emanated from the service provider.

In dealing with this matter it is all too easy to lose sight of basic common sense. The faxes that we have seen, and about which so many complaints have been made, are so obviously going to cause offence, that there really is little purpose in trying to tinker with them. The service provider had been through a full breach process which should have been ample and complete warning enough for anyone. Mr Smith was warned in meetings that the faxes were simply not acceptable. The letter of 15 December reinforced the message. The service provider, nevertheless, continued to send out faxes no less, and probably more, offensive, even after all of that.

Having read the very considerable bundle of papers, including all of Mr Smith’s correspondence on behalf of the service provider, and having heard the matters put to us, we find that the service provider is in breach of both paragraph 3.1.2 and paragraph 1.3.3 (a) of the Code.

We regard the breaches as very serious, in particular because:

w very considerable offence has been caused to a large number of people, including people who have received what they found to be very offensive material on more than one occasion;

w we believe that the service provider’s behaviour is explicable only on the basis of a decision to deliberately flout the Code;

w the service provider has received much previous advice;

w the service provider’s behaviour appears to have worsened rather than improved as time has gone by;

w the service provider refuses to recognise the authority of ICSTIS, which reinforces our view that the disregard of the Code is entirely deliberate.

In the light of the foregoing, and in accordance with our power under paragraph 5.8.2 (g) of the Code, we recommend to Torch Communications Ltd that Fax Data Services Ltd should not be permitted to provide any premium rate services for the period of one year from the date of this adjudication. It has occurred to us to impose a longer bar, but we have decided that one year is the appropriate period because it is conceivable that worse material could have been distributed. In addition, under paragraph 5.8.2 (b) we require, prior to the operation by Fax Data Services Ltd, Mr Smith and any other Director of Fax Data Services Ltd, assurances that he/they will not in future operate any premium rate service personally or through a company which, in any way, breaches the ICSTIS Code.

We also impose an administrative charge on the service provider under paragraph 5.9.1 of the Code and in addition require the service provider to pay all the legal costs incurred by ICSTIS in this case. In addition, we request Torch Communications Ltd to withhold any monies due to the service provider pending all payments by the service provider of the administrative charge and legal costs.