Regulator Ofcom has fined GCap Media £1.11 million and accused its senior management of “gross failure” over a competition where entrants had no chance of winning.
The Secret Sound competition was run on 30 local radio stations in GCap’s One Network, challenging listeners to identify a mystery sound.
GCap was found in breach of the Broadcasting Code after Ofcom discovered that programme makers deliberately put on air entrants who had texted in the wrong answers to prolong the promotion and encourage more people to pay to enter.
In a statement today (June 26), Ofcom said: “As a result, those listeners who had paid to enter the competition on these occasions had no chance of winning.”
It went on to criticise GCap for hindering its investigation by refusing to provide details and submitting information that was ambiguous. “The seriousness of the compliance failures was compounded by some of the actions taken by GCap after the incidents had come to light,” Ofcom said.
“This was the first case of its kind in which the behaviour of the licensee (or as in this case, the parent company acting on behalf of the licensees) had effectively hindered Ofcom’s investigation.”
The regulator concluded that the intention had not been to generate extra revenue but to “increase the ‘entertainment value’ of the competition”. However, it “took the view that the production team’s actions were calculated and deliberate and evidenced a complete disregard for those listeners who paid to enter, as well as the audiences overall. This was inexcusable.”
It is the highest financial penalty to be imposed on a UK commercial radio company by a regulator. It is the second time GCap has been fined over the Secret Sound competition, which ran in January last year: PhonePayPlus, the premium-rate phone regulator, fined the company £17,500 last year for “manipulative practice” that demonstrated that the competition “was not run in good faith”.
In a statement today, GCap Media said: “The competition ran over 16 months ago. Since then GCap has undergone two senior management changes and a change of ownership, now being wholly owned by Global Radio.
“Today’s ruling is taken extremely seriously by GCap. The new management and owners look forward to building a strong future for the commercial radio industry where the trust of its listeners and of its regulator is of the highest importance.
“To that end the new management are already putting in place new measures to build on the already improved controls implemented at GCap and the company has not run premium rate competitions of this kind for the last 12 months.”
Ofcom reported that GCap’s efforts to remedy the breaches at the time had also been “entirely inadequate”. “GCap was neither as full or as frank as it should have been either with Ofcom or its listeners.”
The company’s internal investigation “did not appear… to have been either thorough or extensive”, the regulator said, with no formal written report produced and GCap’s board given only a “verbal report” of the incidents.
There was a single listener refund of £2, which the regulator dismissed as “wholly inadequate”.
Ofcom found the practice of deliberately selecting entrants with wrong answers had been agreed at a programme meeting by a “director” with operational responsibility for the content and production of network syndicated programming. GCap said the “director” was a “mid-ranking employee” and not a member of its senior management.
Ofcom added that 297,215 entries were made to Secret Sound, generating total revenue of £104,536. GCap received 41 per cent of this – £42,852 – although the actual cost to competition entrants would have been greater because of additional operator charges.