Eckoh Technologies Regulatory News (ECK)

6 Jul 2007 09:34

Eckoh PLC06 July 2007 Eckoh Plc ("Eckoh" or the "Company") Response to the ICSTIS Adjudication on the "Richard and Judy show" Eckoh acknowledges the ICSTIS adjudication on the breach of its Code of Practice(the "Code") relating to the "You Say, We Pay" competition (the "Competition")on the "Richard and Judy show" and provides the following response. . Eckoh co-operated fully with the investigation. It made written submissions on 7March 2007 and 23 March 2007 and appeared before an adjudication panel on 11June 2007. The Company is pleased that the ICSTIS panel commented that "Eckoh'scooperation with the ICSTIS investigation in this case has been exemplary". Under the Code, the Service Provider (i.e. Eckoh) is the only party that can besanctioned by ICSTIS for any breaches of compliance, irrespective of who isactually responsible or how this came about. Information providers, in this case Channel 4 and Cactus, are outside thejurisdiction of ICSTIS and it is unable to take action against them unless theygive their consent. Both Channel 4 and Cactus decided not to provide any witnessevidence at the hearing. ICSTIS acknowledges that "Eckoh had not had any direct control over thebroadcast of the Richard and Judy programme" and the adjudication states that"the panel is aware that Ofcom (whose remit includes broadcasters) hasinstigated an investigation into this Competition under the Broadcasting Code".The Company awaits the outcome of this investigation with interest. Eckoh informed Cactus about the compliance problem on 26 January 2007, confirmedthis by email on 28 January, and then followed it up on 30 January and 12February. For the period 29 January to 15 February 2007, the revenue generatedfrom calls was £176,536.37 of which £173,662.68 was paid to Channel 4 and Eckohreceived £2,873.69 Following is a summary of the adjudication: • For the purposes of deciding a sanction an ICSTIS panel must hold a service provider accountable for the actions of its information providers. • The panel consider that a fine of £150,000 is appropriate in this case but has stated that "part of the purpose of the sanction is to provide an incentive to other service providers who may not have taken the steps which Eckoh have done to ensure compliance" • It is not in dispute that the final list of names was regularly being received by Cactus before further solicitations to ring in were made by the presenters of the television programme • Ofcom have instigated an investigation into this Competition under the Broadcasting Code • Eckoh has a good record in relation to compliance with the Code and is a reputable and respected provider of telephony services • Eckoh has introduced an extensive series of remedial measures, including commissioning its own audit carried out independently by KPMG The Company has already made a sufficient provision in its 2006 accounts for thefine levied. Consequently, there is no financial impact on the current year. Nik Philpot, Chief Executive Officer of Eckoh said: "We accept that Eckoh mademistakes with ''You Say We Pay'' but it seems clear to us that all three partiescould and should have spotted the problem earlier. It was Eckoh who identifiedit and tried to take action. We have put in procedures that set the benchmark interms of best practice and we are pleased that ICSTIS has described these as anadmirable and comprehensive range of measures to ensure compliance in thefuture. What this adjudication highlights is the important point that, in our opinion,the regulations governing premium rate services linked to television programmesare fundamentally flawed. It is frustrating that, because ICSTIS can only adjudicate against Eckoh, we arethe only party to be sanctioned today whilst the fate of the broadcaster has towait for any Ofcom investigation to conclude. Furthermore, neither regulatorappears to have jurisdiction to deal with the production company. Only last weekOfcom fined another broadcaster in a case involving premium rate telephony yetthere has been no action taken in that case by ICSTIS. This illustrates thatcurrent regulation is unpredictable and inconsistent. In our view it would befar better for the industry and the public in cases like these if the regulatorstook a joined up approach and dealt with all the evidence and all the partiescollectively in a clear and transparent manner. We regret the damage this particular case has caused to the general public andto their perception of these types of services. We are extremely sorry foranyone who entered the competition and were not dealt with appropriately. Eckohtakes its responsibilities and good reputation extremely seriously and, inconjunction with Channel 4, has already offered a refund to those affected inthe recent series." Eckoh plcNik Philpot, Chief Executive OfficerAdam Moloney, Group Finance DirectorJim Hennigan, Executive Directorwww.eckoh.com Tel: 01442 458 300 Corfin CommunicationsHarry Chathli, Neil Thapar, Ben Hunt Tel: 020 7929 8989 Seymour PierceJonathan Wright Tel: 020 7107 8000 Notes to Editor The Richard and Judy programme ran from 5pm until just before 6pm, and theon-air competition concluded at approximately 5.42pm. The Competition, includingthe relevant number to call was publicised on screen and on air by thepresenters during the course of the programme. The telephone lines were openuntil about 5.38pm, and callers who called before this time would have heard arecorded message asking them to answer a multiple-choice question and to leavetheir name and telephone number. Eckoh selected 24 participants (in four tranches of six) randomly from those whohad called and answered the question correctly and passed these names on to theproduction company, Cactus. Cactus would then select a winner and telephone themback to validate their details before they were heard on air. In practice, all24 names had usually been sent to Cactus by about 5.15pm. However, the lineswould still be open for another 20 minutes or so, and the programme regularlycontained a second on screen solicitation from the presenters for viewers toenter the Competition after the names had been selected, followed by a thirdsolicitation as part of the programme trail before the advertising break. ICSTIS acknowledged that "Eckoh had not had any direct control over thebroadcast of the programme". Whilst Eckoh acknowledges that the Richard and Judy service operated in anon-compliant manner for a period of time, it was only in the latter stages thatEckoh became aware that the service was non-compliant. The winner selectionprocess that Eckoh followed was one already in place when Eckoh took over theaccount from the previous service provider. When Eckoh conducted a review ofbroadcast services and ultimately realised that this process was non-compliantit raised this problem with Cactus, prior to the new series beginning in January2007. However, despite the seriousness of the issue and Eckoh following up onthis on two further occasions, Eckoh was unsuccessful in having the issueresolved before the problem was highlighted in the press. Since the Richard and Judy case became public Eckoh's processes have beenaudited by Deloittes on behalf of ITV and it appointed KPMG to independentlyreview all of the services it provides to media clients. No significant issueshave been identified by either of these reviews. Eckoh is also not being formally investigated by ICSTIS in any other cases. This information is provided by RNS The company news service from the London Stock Exchange