Ericsson Telecommunications, the content arm of Swedish telecoms equipment maker Ericsson, has been fined $100,000 for billing a customer here for premium- rate SMS services that he had not signed up for.
This is the highest fine levied since stiffer penalties were introduced earlier this year to deal with a rising number of complaints against companies that send unsolicited premium-rate text messages, including those that peddle ringtones and games.
The customer had complained to the Infocomm Development Authority of Singapore (IDA), which found that he was using a 'recycled' mobile number someone else had given up in May last year.
When a subscriber cancels his mobile line, the number is rendered inactive or 'quarantined' for three months, before his telco can re-issue it to someone else.
Even though the number was quarantined and not in use, Ericsson continued to bill the number a monthly charge, which resulted in the new subscriber having to pay for its premium services.
To make things worse, Ericsson's hotline was not working, so the new customer had no way of canceling the service.
On account of not providing a working hotline, the IDA issued a warning to Ericsson.
But it fined the company for the erroneous billing under the Premium Rate Services Code introduced in 2007, making it Ericsson's second breach in two years. It had been fined $73,000 in 2009.
For the repeat offence, and for not complying with the IDA's request for information during its investigation, the regulator decided to slap Ericsson with a hefty fine of $100,000 in July.
'Ericsson explained that the erroneous charging was due to a technical malfunction of its content provider's system. Ericsson's explanation was not acceptable,' said the IDA on its website.
'Ericsson had therefore failed to put in place its own safeguards to ensure that it does not charge any person for any unsolicited services.'
Last year, the IDA received 156 complaints, up from 86 in 2009. There were 150 complaints for the first six months of this year alone.
Consumers had alleged, among other things, that they had been misled by SMS advertisements and unwittingly bought ringtones and games.
Each SMS to subscribe to the content can cost as much as $1 and the data downloaded, many times more.
In March, the IDA increased the penalties for first-time offenders to up to $10,000, and up to $100,000 for the second offense.
Third-time offenders may have their licences suspended for at least six months, and further infringements could lead to longer suspensions and license cancellation.
The lower fine of $10,000 had previously been meted out to repeat offenders.
For instance, last year, Sybase 365, the content arm of data software firm Sybase, was fined $10,000 for charging 108 users several times for an SMS quiz service - its third offense in two years.
To further protect consumers, the IDA had said it would also require telcos to allow mobile phone users to bar premium-rate services, from the first quarter of next year.
This would be done via a subscription service offered by the telco.
Lawyers said the tougher actions go hand in hand with the recently proposed Do-Not-Call registry, which would allow consumers to opt out of unsolicited telemarketing calls and text messages.
The registry, maintained by the Ministry of Information, Communications and the Arts (Mica), is part of an overarching consumer privacy law which could kick in as soon as next year.
There are more than 7.5 million mobile phone subscriptions in Singapore.
Mr Bryan Tan, director of Keystone Law Corporation, said a multi-prong approach is necessary as the nature of these complaints - which are rising in numbers - is multi-faceted.
'Sometimes, it is about wrongful charging, sometimes about unsolicited SMS being a nuisance.'© Jakarta Globe
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