MBLOX hit by ICSTIS Crazy Frog Ruling

The premium rate telephone services regulator ICSTIS has fined mBlox £40,000 and ordered it to refund 338 customers who complained to the regulator about the Crazy Frog ads –or more specifically about the unclear charging basis, where people who thought they were downloading a single ringtone were actually signing up for a subscription service that would cost them up to £5 a week.

As ICSTIS put it, “while a great deal of thought had been put into producing the Crazy Frog advertisements, the same could not be said about the terms and conditions”.

Although the ringtone came from Jamba and the marketing was done by Jamster, the regulator decided that mBlox was culpable since it provided the payment processing mechanism.

ICSTIS director George Kidd said: “The hearing panel has made clear that consumers should not be made to work to find out what any premium rate service involves or costs. Although the panel found that there was no fraudulent or malicious intent behind the service, the companies concerned showed a careless disregard and unprofessional attitude to consumers in failing to be clear on the exact nature of the service.”

mBlox says it “fully accepts ICSTIS’ adjudication on the appropriateness of the Crazy Frog promotion” but it is considering requesting a judicial review of the interpretation of the ICSTIS code that has held mBlox responsible for the action of a third party in the form of Jamba.

A mBlox statement pointed out that the ICSTIS Code is currently undergoing review. “This is a fast-evolving industry in which regulations are regularly reviewed and improved so as to protect consumers in the best manner possible … mBlox has made representations to ICSTIS that in future the regulatory framework should make the people who create and promote mobile content, the content (information) providers, accountable for the content transmitted to consumers and the marketing practices they adopt.”

mBlox would seem to have a point here. It operates mobile transaction network that facilitates message delivery and financial settlement between content providers and the mobile operators, but it does not create or promote any content itself.