Summary

Facts

In February 2006, IDA received close to 200 complaints from mobile end users about being wrongly billed by mTouche Pte Ltd (mTouche) for unsolicited CNY greetings. mTouche claimed that the CNY greetings were sent by its corporate customer, Globalfun Inc. (Globalfun), and were meant to be free of charge. However, due to a mistake in the charging setting during the SMS message dispatch process, about 300,000 mobile end users were subsequently charged $1 each for the message.

Decision

IDA determined that mTouche had breached the following provisions of the Telecom Competition Code 2005 (the Code):
1. Section 3.2.2 – Duty to Disclose Prices, Terms and Conditions
2. Section 3.2.6.2 – Prohibition on Unauthorised Use of EUSI
3. Section 3.3.3 - No Charges for Unsolicited Telecommunications Service

Reasoning

1. IDA deemed the CNY greetings a telecom service provided by mTouche. Accordingly, mTouche would be required to inform these customers of the prices, terms and conditions of the service prior to provisioning. However, mTouche had failed to inform these affected customers that they would be charged for the CNY greetings received prior to its provision of the CNY greetings service to them.

2. mTouche admitted that it had allowed Globalfun access to its customer database (i.e., the mobile phone numbers) in order to send the CNY greetings. mTouche’s disclosure of the mobile phone numbers to Globalfun clearly falls outside the scope of the authorized purposes under the Code. Accordingly, mTouche should have obtained the consent of the relevant customers before such disclosure.

3. mTouche claimed that Section 3.3.3 of the Code had no application to the incident because the billing errors were reversed and all the affected mobile customers have been fully refunded. IDA rejected mTouche’s claim as customers of SingTel Mobile and M1 were billed for the CNY greetings which they had not consented to receiving, and some of these mobile customers made upfront payment of the $1 charge as stated in their bills. mTouche had also acted recklessly by not taking the necessary measures to ensure that Globalfun did not send out chargeable SMS.