report of the adjudicator

Thursday, 13 October 2011 of 22

REPORT OF THE ADJUDICATOR

Complaint reference number: #7317

WASPA member(s): Foneworx

Membership number(s):

Complainant: Public

Type of complaint: Unlawful Lottery

Date complaint was lodged: 2009-08-10

Date of the alleged offence: 2009-08-10

Relevant version of the Code: 7.4

Clauses considered: 3.1.2, 3.5.1, 3.5.2, 3.9, 4.1.1

Relevant version of the Ad. Rules: 2.3

Clauses considered: 8.2.2

Related cases considered: 7103, 7104, 7105, 7289

Wireless Application Service Provider Association

Report of the Adjudicator Complaint

#7317


Complaint

1. On the 08 August 2009 a complaint was submitted to the WASPA secretariat by a

journalist relating to short code 34704 which is operated by Foneworx (the SP) in which

the complainant indicated that:

1.1. the SP had contravened the Lotteries Act 57 of 1997 (hereinafter the “Lotteries

Act”);

1.2. the SP was contravening “a WASPA rule that states that non cash prize may be

offered as nothing is being promoted”.

SP Response

2. On the 13th August 2009 the SP responded indicating that:

2.1. The Promotion was a service and did not deliver content (and as such s3.5.2 of the

WASPA code was not relevant);

2.2. The SP has contacted the WASPA secretariat in order to obtain their opinion on the

matter and the WASPA Secretariat has indicated that in their opinion the campaign

is acceptable, although – possibly – a copy line on the reverse of the pamphlet

could have indicated “SMS’ charged at R2.00”.

Complainant Response

3. The Complainant then reiterated his wish for the matter to be adjudicated upon with a

special reference to an illegal lottery. He further referred to clauses 3.1.2 (members

committed to lawful conduct), 3.9 (various requirements relating to Information

Providers), 4.1.1 (members must have honest and fair dealings with customers).

WASPA Secretariat request



#7317


4. The WASPA secretariat duly contacted the adjudicator and requested that this matter be

put on hold pending the outcome of the appeal in the matter of complaints 7103, 7104

and 7105. The adjudicator duly agreed to this postponement as the appeal in the said

matters dealt with the issue of the unlawfulness of competitions.

Outcome of Appeal in complaints 7103, 7104 and 7105

5. The appeal in the above complaints was duly delivered on the 04 January 2011. Within

the appeal it was duly found that WASPA adjudicators do not have the right to make a

finding on the lawfulness or otherwise of WASPA members’ conduct. As the merits of

this argument were fully traversed within that adjudication which is easily available on

the WASPA web site they are not repeated here.

Complainant Dies

6. Thereafter on the 09 June 2011 the WASPA secretariat was informed by the

complainant’s wife that the complainant had passed away and further that she wished

to close all complaints lodged by her husband.

Portions of the Code of Conduct (version 7.4) considered:

7. 3.1.2. Members are committed to lawful conduct at all times.

8. 3.5.2. If a member becomes aware of illegal content under that member’s control, the

member must, immediately suspend access to that content. Where required to do so by

law, the member must report the illegal content to the relevant enforcement authority.

9. 3.9.1. Members must bind any information provider with whom they contract for the

provision of services to ensure that none of the services contravene the Code of

Conduct.

10. 3.9.2. The member may suspend or terminate the services of any information provider

that provides a service in contravention of this Code of Conduct.

11. 3.9.3. The member must act in accordance with the WASPA complaints and appeal



#7317


process and if appropriate, suspend or terminate the services of any information

provider.

12. 4.1.1. Members must have honest and fair dealings with their customers. In particular,

pricing information for services must be clearly and accurately conveyed to customers

and potential customers.

Decision

13. From the above facts it is clear that whether there has or has not been a breach of the

Lotteries Act is irrelevant for the purposes of this adjudication as WASPA adjudicators do

not have the jurisdiction to make a finding on this issue.

14. There was further the allegation that the competition did not promote any product. A

quick look at the pamphlet (see Annexure D) makes it immediately clear that four

products are promoted, to wit: Airwick, Mr Min, Vanish and Dettol. Bearing in mind that

the actual product must be purchased before the code within the products packaging

can be sent via SMS, the allegation that a particular product / s is / are not promoted is

clearly incorrect. In addition it should be noted that the requirement that a particular

product be promoted in a promotional competition forms part of a now repealed part of

the Lotteries Act and does not, as alleged by the complainant, form part of the WASPA

Code of Conduct.

15. A further aspect of the pamphlet relates to the cost of the SMS to consumers as picked

up by the WASPA Secretariat. While the cost of the SMS is clearly indicated within the

terms and conditions as well as on the front page of the pamphlet, it is not highlighted

on the second page of the pamphlet underneath the marketing blurb. A reference to the

Advertising Rules (clause 8.2.2) indicates that the cost of the service must be at least

font size 11 and in close proximity to the short code to be used. In my opinion the text as

indicated by the advertisement on the front page meets this requirement. The same

marketing blurb is then repeated on the second page, but this time omitting the cost of

the SMS. In my view the cost of the SMS should have been repeated on the second page

using a similar font size to that used in the first page. Obviously this issue ties in with

clause 4.1.1 which requires that SPs to clearly display pricing information. However

bearing in mind that the cost was disclosed twice, once in a fairly large font, I consider



#7317


any potential harm to the customer to be negligible.

16. It is somewhat unclear why the complainant in this matter alleged that this service was

for the purposes of providing content. This is clearly incorrect and needs no further

comment.

17. While the above conclusion essentially concludes that particular aspect of this

adjudication, three additional questions are of somewhat academic interest, which are:

17.1. In the event that the complainant withdraws the complaint must the

adjudicator abandon the complaint?

17.2. Should this complaint be referred to the Lotteries Board for further

investigation?

17.3. Does a delay in the adjudication of a matter influence the outcome of the

adjudication?

18. These questions have been dealt with in complaint 7289 and reference should be made

to the comments made therein.

19. For the above reasons the complaint in relation to the alleged breach of s3.1.2 and 3.5.2

and 4.1.1 must be dismissed.

20. As regards the failure to disclose the price of the SMS on the second page of the

pamphlet in a sufficiently large font directly under the short code (as required by

advertising rule 8.2.2) I find that the SP breached this requirement, although this breach

was very minor in its nature.

Mitigation

21. The SP responded timeously and in a complete fashion.

22. The pamphlet did disclose the cost in the earlier text but did not repeat it.

Aggravation

23. N/A



#7317


Sanction Imposed

24. The SP is cautioned to reproduce the cost of the SMS below the short code in future

advertisements.

Appeal

Please note that should the SP or IP wish to appeal this decision it must inform the

secretariat of this within five working days of this decision in terms of section 13.6 of the

Code of Conduct version 7.4.



#7317


Annexure A – Complaint

PLEASE NOTE THAT SOME IDENTIFYING PERSONAL INFORMATION HAS BEEN REMOVED BY

THE ADJUDICATOR DUE TO THE FACT THAT THIS ADJUDICATION WILL BE PUBLICLY

AVAILABLE.

----- Original Message -----

From: "WASPA Complaints <REMOVED BY ADJUDICATOR>

To: "Graham Groenewaldt" <REMOVED BY ADJUDICATOR>

Cc: "Complaints" <[email protected]>

Sent: Wednesday, August 12, 2009 8:47 AM

Subject: [WASPA.complaints] [formal] WASPA Code of Conduct complaint

Ref:#7317

Dear WASPA member,

The attached complaint has been lodged with WASPA against Foneworx.

This complaint is being processed according to the formal complaint

procedure described in section 13.3 of the Code of Conduct.

< template notice snipped by <REMOVED BY ADJUDICATOR>

--- A copy of the complaint follows below ---

Complainant : <REMOVED BY ADJUDICATOR>

Email : <REMOVED BY ADJUDICATOR>

Referred :

Date : 2009/08/10

Wasp_Service : Foneworx

Description : See attached fax complaint received

Status : Formal

Attached file : 27829734_Foneworx.pdf

mailto:[email protected]



#7317


Annexure B - attachments



#7317




#7317


Annexure C - Reply ----- Original Message ----- From: Graham Groenewaldt To: <REMOVED BY ADJUDICATOR> Sent: Thursday, August 13, 2009 9:02 AM Subject: [WASPA.complaints] WASPA Code of Conduct complaint Ref:# 7317

Dear WASPA

We refer to the complaint from Mr. H. Senekal lodged against us and respond as follows:

Mr. Senekal has been in contact with us via e-mail requesting information regarding this

campaign which we have forwarded to him. We have attached a copy of the e-mail

correspondence between him and ourselves for your reference.

Mr. Senekal's complaint refers to clause 3.5.2 of the code as attached below. Our understanding

of this clause is that this refers to the transmitting of content. Please be advised that this service

is NOT = delivery of content or subscription service. It is a simple product promotion, which has

been promoted via radio and in-store (See attached)

We have again looked at the mechanics of this campaign and still feel that it fully complies with

the code. Please advise if there is anything we are missing and we will be sure to rectify asap.

"3.5. Content control

3.5.1. Members must not knowingly transmit or publish illegal content.

3.5.2. If a member becomes =ware of illegal content under that member’s control, the member must,




#7317


immediately suspend access to that content. Where required to do so by law, the member must report the illegal content to the relevant enforcement authority.

3.5.3. Members must co-operate with any content orders lawfully issued by enforcement authorities."

Below is a copy of the correspondence with Ant Brookes regarding this issue.

Should you require any further information, please call the undersigned at your convenience

Regards

Graham Groenewaldt

FoneWorx

<REMOVED BY ADJUDICATOR>


From: "Ant Brooks" <<REMOVED BY ADJUDICATOR>>

To: <REMOVED BY ADJUDICATOR>

Sent: Tuesday, August 04, 2009 12:34 PM

Subject: Fwd: Fw: [Fwd: R1million Competition]]

Hi Graham,

Feedback from the WASPA monitor:

| This leaflet is actually fine. |

| They could have inserted a copy line on the reverse, close to the

| short code: "SMS's charged at R2-00". |

| But I would never have lodged a complaint against them for this | leaflet.

Warm rregards,

Ant Brooks

WASPA Secretariat


From: "Ant Brooks" <REMOVED BY ADJUDICATOR>

To: "Graham Groenewaldt" <REMOVED BY ADJUDICATOR>

Sent: Tuesday, August 04, 2009 9:24 AM

Subject: Re: Fw: [Fwd: R1million Competition]

Hi Graham,

Just to confirm, I've passed this on the to WASPA Monitor for an opinion. I've also asked the complaints team to check if we've

received any consumer complaints regarding this promotion. (I don't think so, but would like them to verify that.)



#7317


Warm regards, Ant Brooks

WASPA Secretariat

---

Graham Groenewaldt =rote: Hi Ant

FYI

regards

Graham

----- Original Message ----- From: "WASPA Complaints <REMOVED BY ADJUDICATOR> To: "Graham Groenewaldt" <REMOVED BY ADJUDICATOR> Cc: "Complaints" <[email protected] Sent: Wednesday, August 12, 2009 8:47 AM Subject: [formal] WASPA Code of Conduct complaint Ref:# =317 Dear WASPA member, The attached complaint has been lodged with WASPA against Foneworx. This complaint is being processed according to the formal complaint procedure described in section 13.3 of the Code of Conduct. accordingly: - You have five working days to respond to the complaint, and to provide the WASPA secretariat with any information you deem to be relevant to this complaint. - after five working days have passed, this complaint, together =ith your response (if any) will be assigned to an adjudicator for review, and if upheld, determination of appropriate sanctions. - You do not have an obligation to respond to this complaint. Should the WASPA secretariat not receive any response from you within this time period, it will be assumed that you do not wish to respond. - Your response, and any other correspondence relating to this complaint, must be sent to <REMOVED BY ADJUDICATOR>. Correspondence sent to any other address may not be deemed to constitute a formal response. - The WASPA Secretariat will confirm receipt of your response. If you have any questions regarding the Code of Conduct or the complaints procedure, please address your queries =to <REMOVED BY ADJUDICATOR>Please confirm your receipt of this message. Warm regards, WASPA Secretariat --- A copy of the complaint follows below --- Complainant : <REMOVED BY ADJUDICATOR> Referred = Date : 2009/08/10 Wasp_Service : Foneworx



#7317


Description : See attached fax complaint received =BR Status : Formal Attached file : =7829734_Foneworx.pdf



#7317


Annexure D - Correspondence From: Graham Groenewaldt <REMOVED BY ADJUDICATOR>

Sent: 07 August 2009 07:24 AM

To: <REMOVED BY ADJUDICATOR>

Subject: Re: Fw: [Fwd: R1million Competition]

<REMOVED BY ADJUDICATOR> We have asked WASPA to review the promotion, which they have now done, and they concur that this promotion is not =n breach of the WASPA Code of Conduct. Please note that I referred to the cash prizes in terms of the lotteries Act, and not the WASPA Code of Conduct. I also made reference to Cash in terms of certain provisions of the Lotteries Act. It is important that one also considers the provisions of the Consumer Protection Act in conjunction with the lotteries Act This is important as the CPA repeals section 54 of the lotteries act and thus the Position becomes more subtle and complex. With all due respect, it seems you do not fully understand the difference between =AS lines and Short Code PR SMS numbers. In the spirit of transparency, we therefore invite you to meet with us for a cup of coffee and an opportunity to discuss the complexity, which should give you a much better understanding of the industry. I would urge you to contact me to set up a meeting at our mutual convenience. Please be advised that should you not accept this invitation and the opportunity to avail yourself of the full picture and to gather =he facts, and rather go to print with an article that is inaccurate, we reserve our rights

Regards Graham Groenewaldt FoneWorx (Pty) Ltd <REMOVED BY ADJUDICATOR> ----- Original =essage -----

From: <<REMOVED BY ADJUDICATOR>> To: "Graham Groenewaldt" <<REMOVED BY ADJUDICATOR>>

Sent: Tuesday, August 04, 2009 11:54 AM Subject: Re: =w: [Fwd: R1million Competition] > Hello Graham, Thanks for the reply. > > I undestand your position in the promoting of the competition and that you > are doing so on behalf of a client. However the code of conduct and > advisories from Waspa state clearly that the SP, because you ae bound by > contract with the NP and the IP you are fully responsible for their deeds, > so as to say. Thus if they are contravening the Lottereis Act, which does > not fall under the control of WASPA or any other act for that matter, say > the act governing unfair business practises, (although I have not yet seen > a contract between the SP and the NP and the IP), suc h a contract should > point out that a premium short code not be used for illegal purposes. > > Foneworx has supplied a VAS rated short code. This as you know mean Value



#7317


> added Service. So the user, the public sending the sms must in return > receive something of value, a ringtone perhaps. Here they recieve no > benefit and they pay for the call to the financial benefit of foneworx and > the others. Do you think it is fair business practise to let a person who > is keen to win a prize pay you for your service on behalf of your clients > for structuring the deal and disbursing the money? > > Now let us have look at the sms premium short code. When entering in any > form of competition where a premium short code is used the Lottereis Act > is summarised in the attached WASPA advisory clearly states that if > participant pays in any form towards entering a competition, it is an > illegal lottery. Further, the entitiy pronoting the competition, for it > to qualify as a promotional competiton, musthave THEIR products as > prizes! Otherwise, as mentioned in the advisroy of WASPA to Foneworx, it > is an illegal lottery. In other words to be silly for a moment, only the > reserve bank may offer cash, because cash is their product. the minute yu > see a cash prize offered in any form of draw, whether by chabce of skill, > lit is deemed to be an illegal lottery. > > Please let me know where in the code of conduct you saw the R1 million > cash prize mentioned. I cannot see it. Ironically this would be contrary > to WASPA's own rules! > > Thanks > Hannes Senekal > > (Graham, i cannot activate the attachment for some reason. Willl you let > me have a fax number to send it to you.Your web page shows no phone or fax > number?) > > > > > > > ><=R>> > > > > >> Hi <REMOVED BY ADJUDICATOR> >> >> Please note that FoneWorx never runs a campaign for its own purposes. We >> are >> merely the technical back-end for companies who want to promote their own >> products. All clients and agencies are made aware of the WASPA Code of >> Conduct and accept the terms thereof. >> >> In the case of your query, the following information is relevant: >> >> Campaign is for Vanish, Dettol, Mr Min and Airwick >> All 4 products are from 1 product house and the design of the campaign >> was created by their agency. >> >> Start Date - 16th June 2009 >> End Date - 24th August 2009 >> >> We have checked the mechanics of the campaign ,and they ARE promoting >> their own products. Our understanding of the Lotteries Act is that the



#7317


>> winning of cash prizes up to R1 million, is allowed. >> >> As far as the WASPA Code of Conduct is concerned, we have checked all >> promotional material and find them to be in full compliance. >> Nevertheless we are referring this campaign to WASPA for opinion. >> >> Should you have any further queries, please contact me on <REMOVED BY ADJUDICATOR> >> >> Regards >> >> Graham >> >> ----- =riginal Message ----- >> From: "Robyn Fortuin" <REMOVED BY ADJUDICATOR> >> To: "'Graham Groenewaldt'" <REMOVED BY ADJUDICATOR> >> Cc: "'Sarie Smith'" <REMOVED BY ADJUDICATOR> >> Sent: Friday, July 31, 2009 7:45 AM >> Subject: FW: [Fwd: =1million Competition] >> >> >>> Hi there Graham, >>> Please see email below >>> >>> regards >>> Robyn Fortuin | Support Help Desk >>> >>> Office: 011 293 0000 | Fax: 086 518 =357 | Email: [email protected]

>>> | >>> Web: www.foneworx.co.za >>>

>>>

>>> -----Original Message-----

>>> From: <REMOVED BY ADJUDICATOR> >>> Sent: 30 July 2009 08:40 PM >>> To: [email protected] >>> Subject: Re: [Fwd: R1million Competition]

>>>

>>>>> ---------------------------- Original Message

>>>>> ----------------------------

>>>> Hello Graham

>>>

>>> The short code is 34704 and the keywords are the barcodes from the

>>> products such as Airwick etc Than ks

>>>

<REMOVED BY ADJUDICATOR>>>>>

>>>>

>>>>

&=t;>>>

>>>>

>>>>

>>>&g=;

>>>>> Subject: R1million Competition

>>>>> =rom: <REMOVED BY ADJUDICATOR> >>>>> Date: Mon, July 13, 2009 =:00 pm >>>>> To: [email protected] >>>>>


http://www.foneworx.co.za/





#7317


>>> -------------------------------------------------------------------------= >>>>> >>>>> Hello, >>>>> >>>>> It seems that you are breaking a WASPA rule that states that no cash >>>>> prizes may be offered as nothing is being promoted. It may also >>>>> contravine the Lotteries Act. >>>>> >>>>> Before I pass on the information of the competition to WASPA and the >>>>> Lotteries Board for adjudication may I please have your comments. >>>>> >>>>> Thanks >>>>> <REMOVED BY ADJUDICATOR>>>>>



#7317


<=BODY Annexure E – Leaflet



#7317


report of the adjudicator

Documents