Eckoh, the company that ran the phone line services for the “You Say, We Pay” competition on the Richard and Judy show on Channel 4, has received a record fine of £150,000. ICSTIS, the premium rate telephone services regulator, ruled that the competition seriously misled viewers by actively inviting calls after potential winners had already been selected.

An investigation revealed that nearly half the calls attempting to enter the competition, costing £1 each, were received after the shortlist of potential winners had already been submitted. In a sample two week period, 47% of calls from viewers attempting to enter the competition were received after the shortlist had been drawn up.

The Richard and Judy show was commissioned by Channel 4 Television and produced by Cactus Television. Eckoh UK Ltd was deemed the service provider under its contract with 4 Ventures, the commercial division of Channel 4.

The You Say, We Pay competition was promoted by both presenters during the programme which was broadcast between 5pm and 6pm, five days a week for much of the year. A shortlist of 24 names was drawn up daily at 5.15pm. The competition lines would remain open for an additional 20 minutes with regular on screen solicitations from both presenters asking for viewers to enter the competition, despite the fact that Eckoh had pre-selected and supplied names of potential winners to Cactus TV.

The procedure came to light when a journalist contacted ICSTIS in February 2007. Following further press enquiries, the competition was removed from the competition the same day.

Cactus TV also produced the Saturday Kitchen programme for the BBC which was found to have invited viewers to call in for a competition on a programme that had already been pre-recorded.

Sir Alistair Graham, the chairman of ICSTIS, condemned the service provider Eckoh. “Winners were being chosen before the competition closing deadline, whilst millions of additional viewers were still encouraged to phone in and pay to enter competition but were denied the opportunity of fair consideration.” He said: “Such reckless disregard for viewers is unacceptable.” He added that “Consumer protection should be at the heart of television rather than a broadcasting philosophy of ‘the show must go on'”.

Eckoh started providing competitions services for the Richard and Judy programme in October 2004 when it acquired the business of a company called Arrow Interactive. There was no compliance review of the programme on the assumption that the competition must be compliant. Although concerns were raised by staff, they were not addressed by senior management.

A hearing concluded that while there was no conscious attempt to defraud the public, there had been “a reckless disregard of the public interest”. It concluded that “The circumstances of the breach are so stark and so blatant that the situation should have been immediately clear and should have been avoided from the outset.”

The £150,000 fine imposed on Eckoh is the largest so far imposed by ICSTIS. The maximum fine it can impose was increased from £100,000 to £250,000 at the end of 2005. The executive had considered imposing the maximum fine and banning Eckoh from running such competitions for six months. It has also sought a sanction that refunds should be paid to contestants, although this has been suspended while Channel 4 puts such a scheme into effect.

In 2006 the You Say, We Pay competition received nearly 1,4 million calls, generating over a million pounds in revenue. In the previous year nearly 3.2 million calls generated over £1.8 million in revenue. Any viewers that consider they were affected should contact Channel 4.

In its 21 years of regulating premium rate services, it was described it as “the most serious participation TV case that ICSTIS has investigated because of the millions of viewers it involved”.

“We can’t help but feel that we’ve been made a scapegoat and we will be considering an appeal once we have seen the result of the Ofcom investigation,” Eckoh said in a statement.

“We accept that Eckoh made mistakes with You Say We Pay but it seems clear to us that all three parties could and should have spotted the problem earlier,” said Nik Philpot, the chief executive of Eckoh. “What this adjudication highlights is the important point that, in our opinion, the regulations governing premium rate services linked to television programmes are fundamentally flawed.”

The case is being referred to Ofcom which may impose its own fine if it concludes the broadcasting code has been breached. Last week, Ofcom fined Channel Five £300,000 for breaches of the broadcasting code in its premium-rate phone-in quiz, Brainteaser, made by Endemol UK subsidiary Cheetah.

The chief executive of Eckoh noted that neither regulator appears to have jurisdiction to deal with independent production companies. “Only last week Ofcom fined another broadcaster in a case involving premium rate telephony yet there has been no action taken in that case by ICSTIS. This illustrates that current regulation is unpredictable and inconsistent.”

“In our view it would be far better for the industry and the public in cases like these if the regulators took a joined up approach and dealt with all the evidence and all the parties collectively in a clear and transparent manner.”

Eckoh has an annual turnover of £75-100 million. The total premium rate telephony market in the UK is worth over £1.2 billion a year, with over 45,000 services in operation at any one time.

Sir Alistair Graham will be presenting the first annual report for ICSTIS next week. The regulator will be re-launched as PhonePayPlus in the autumn.

ICSTIS is considering the introduction of a licensing regime for all broadcast premium rate services. It is working closely with Ofcom, which is conducting its own inquiry into the use of premium rate services in television programmes.

ICSTIS said in a statement: “Given the media frenzy and negative publicity over the last few months, the participation TV sector itself has realised that compliance with the ICSTIS Code of Practice is a must”.