Ofcom To Fine ITV Record $7.8 Million For Premium Rate Phone In Scandals?
By Dianne See Morrison - Tue 29 Apr 2008 03:30 PM PST
ITV (LSE: ITV) could be slapped with a record fine of about £4 million pounds (US$7.88 million) following the conclusion of Ofcom’s six-month investigation into last year’s premium phone line scandal, reports the Mediaguardian.co.uk, who did not cite a source. ITV viewers of such shows as Saturday Night Takeaway and Soapstar Superstar paid some £7.8 million on premium phone calls for either competitions whose winners had already been determined, or on voting that had no effect on the poll’s actual outcome.
A £4 million pound fine--the final figure has not yet been set--would be double the highest fine levied so far, the £2 million pounds GMTV was forced to pay last year, when it was found guilty of similar wrongdoings. Still, it could have been far worse. Under the terms of its broadcasting license, ITV could have been fined up to 5 percent of its “qualifying revenue”—£70 million pounds. The MediaGuardian says it was only ITV chairman Michael Grade’s determination to quickly deal with the mess by appointing Deloitte to investigate the scandal, along with ITV’s assurances it would spend £18 million on compensation and other fixes that kept the fine down.
Premium rate phone calls were a serious money maker for broadcasters, which increasingly turned to them to shore up falling advertising revenues. ITV’s earnings this month shows it has lost £58 million in revenues in 2007, after being forced to give the calls up.
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