The watchdog for premium phone numbers has issued a record £800,000 fine for a company running a rip-off premium phone line that targeted vulnerable elderly people.
So what did this company do, and how can people protect themselves?
The schemeThe company, Churchcastle Ltd, ran wordsearch competitions in national newspapers, promising big prizes.
Those who completed entries received letters suggesting that they were close to winning a major prize, and were encouraged to call a premium rate phone line in order to claim it. They were put under real pressure by the company - receiving up to four letters a week.
The cost of entering the competition was up to £1.53 a minute from a BT landline. The length of the calls ranged from three minutes to almost seven minutes. Entrants were also told that they could claim additional prizes if they stayed on the phone for longer.
The regulator said that the details of costs were largely buried in the small print and that when it arrived, the jewellery prizes were very low quality.
VictimsSince September last year, the watchdog received 15 complaints about the service. It said that it was particularly concerned that elderly people fell victim to the scheme. In many cases, carers who had been looking after elderly people contacted the watchdog after discovering phone bills that were hundreds of pounds higher than usual.
The watchdog said: "All complaints related to elderly consumers, the majority of whom were over 80 years old, and were made by concerned relatives. The complainants raised a number of concerns regarding the size, visibility and readability of the pricing information, "bill shock", misleading promotions (including the poor quality of jewellery items) and the large volume of highly personalised direct mail marketing promotions. In addition, a number of complainants stated that in their opinion the Service took advantage of elderly people who were vulnerable because of their age. Executive monitoring of the Service supported the concerns raised by complainants."
In addition to the fine, the watchdog ruled that anyone who submitted a valid claim should be refunded within 28 days. So if you have been a victim already, it's essential to put in for your refund as soon as possible.
Protect yourselfIf you haven't fallen for this sort of scheme, it's worth being aware of the risks. The watchdog has warned that anyone taking part in any competition which asks for your phone number should take particular care. If you have to call a number to claim your prize, check the small print very carefully and make sure you clearly understand the cost of the call before venturing anywhere near your phone.
This scheme also sent out a large number of highly personalised marketing letters, so it pays to be wary of something that looks like a letter telling you that you've won a prize.
And if in doubt, err on the side of caution. Because while there are people out there winning wonderful prizes, there are many hundreds more being duped into wasting their money.