Dan Sabbagh, Media Editor
Free Elizabeth Arden gift and goodie bags to be won
GMTV, ITV’s breakfast broadcaster, admitted last night that viewers who spent £35 million over four years had no chance of winning one of its phone-in competitions.
The figure, larger than previously expected, opens up a massive liability for the commercial broadcaster, which has promised to refund everybody affected – although ITV hopes that not everybody will claim.
GMTV released the £35 million figure last night after its managing director, Paul Corley, had resigned. He is the first television chief to quit after the string of phone-in scandals that have hit every main broadcaster.
It reflects that GMTV took 25 million premium-rate phone calls from viewers after shortlists of potential winners had already been selected by the phone provider Opera Telecom. Those calls, costing between 25p and £1.80 a time, and made between January 2003 and March this year, had no chance of winning.
Mr Corley, who has run GMTV for six years, said that he would like to apologise unreservedly, adding: “It is important that people take responsibility when mistakes are made that threaten the trust of our viewers.” GMTV would not say whether he would get a payoff.
ITV owns 75 per cent of GMTV, with the rest held by the Walt Disney Company. Last year ITV made £288 million before tax; meaning that if everybody claimed the refund it could cost the broadcaster 12 per cent of profits. Every morning about five million people watch GMTV, which vies with the BBC Breakfastto produce Britain’s most popular breakfast show.
Despite yesterday’s admission, there could be more damaging admissions to come for ITV. Michael Grade, ITV’s executive chairman, ordered a separate investigation into its phone-in competitions in recent years. That inquiry, conducted by Deloitte & Touche, is expected to reveal more examples of phone-in competitions in which some viewers who rang in had no chance of winning.
GMTV’s problems were first exposed in April, when an investigation by the BBC’s Panorama revealed that shortlists of potential winners of competitions were selected at about 8am – an hour before phone lines actually closed. At that time GMTV downplayed estimates that calls amounting to £10 million were not being included, although that estimate has turned out to be relatively accurate.
Yesterday GMTV revealed the results of its own internal inquiry into the affair. In addition to the refunds, it also said it would hold 250 prize draws for affected entrants, each with a £10,000 prize, at a cost of £2.5 million. Its sacked phone provider, Opera Telecom, is to contribute £1.5 million to the compensation fund.
GMTV said one of the reasons that the volume of affected calls was so high was that it had adopted stringent criteria for refunds, and included people who called in at moments after the last successful shortlisted caller. It is possible that some people who called minutes after could still have won a prize. It is understood that GMTV derives about half of its £20 million annual profit from the phone-ins, which is an indicator of how lucrative the competitions had become.
Winners and losers
January 2003 Opera Telecom, on behalf of GMTV, begins picking shortlist
of potential winners before phone lines close at midnight
June 2005 Closing moved to 9am but shortlists picked at 8am
March 5, 2007 ITV suspends its phone-ins, pending a review by Deloitte &
Touche, but independently-run GMTV does not
April 23 Panorama reveals scandal; GMTV suspends competitions. It is
estimated that viewers were cheated out of £10 million a year; this is not
accepted by GMTV
July 25 GMTV admits that 25 million calls should have been entered.
Paul Corley, the managing director, resigns
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While they both made a lot of money out of these phone-ins, I cannot see how either Opera or GMTV made any *additional* income through picking winners early. As far as the callers were concerned they had until 9am to place their entry, so there would have been the same number of entrants up until that time.
Picking the winners early was sheer incompetence and yes, some of those callers would have missed a chance at winning, but nobody made any more money out of them then they would have done by picking the winners on time. Those people who phoned in later have a genuine grievance as they were unaware they stood no chance, but in terms of Fraud for Financial gain, I fail to see how this is the case.
Having experienced Opera's management standards and working practices first hand, I am not at all surprised at the lack of control over how their services are operated.
David, Nechells, Birmingham,
If I set out to quite deliberately to defraud someone I could reasonably expect to be looking at a spell in prison.
It would appear however that if you happen to be someone working for a multi-million pound corporation you are thus above the law.
Corporate corruption, dishonesty and now criminal activity seems to be an acceptable face of British business. The BBC admitted an example of this happening on Blue Peter. So how did they discipline the guilty party? Call in the police? Sack him? No, they transferred him to another department!
The scandalous behaviour at GMTV is really beyond the pale. The police should become involved and the guilty parties sent for trial.
The sum of £35 million is many times greater than most bank robbers/ con men ever aspire to and they when caught are assured of a jail sentence.
This hugely dishonest practice was deemed by GMTV management to be acceptable and when caught the chairman did a runner...oh no sorry.....resigned.
Jeffers, Maidstone,
If we consider the reality, the only way to make big, big money in any sphere of life is to exploit others!!! You can;t give 'VFM' and make a profit!! People are gullible! This is exploited by those who have enough power to reach a large number of 'gullible' and 'vulnerable' people!! The lottery is after people who are struggling to exist on low incomes ... the cosmetics industry exploits people whose looks are changind due to the unavoidable ageing process ... young people are exploited through peer group pressure and 'wanting to belong to a group' through fashion, etc... come on everyone! Lighten up!!! You've gotta have very little conscience to make the big bucks fast!! (It is rarely possible to be in the right place at the right time ..that's called luck!!!)
Yukina, canterbury, UK
i agree with the others here, this is quite obviously fraud. i do hope the police investigate, seeing as they have a direct admission of the wrong doing a conviction shouldnt be too difficult. i too am massively surprised and disapointed the police have not stepped in yet.
joseph, kent,
I am shocked, but not surprised at how deep this goes.
1) The regulator of premium rate phone lines (ICSTIS) is financed by, guess who, the operators of premium rate phone lines. So, whilst ICSTIS will apply sanctions, these sanctions are insignificant in terms of the monies 'scammed'. ICSTIS's practical role (as evidenced by the minimal sanctions applied) is to maintain the pretence that the industry is clean, and that something is being done about the 'bad guys'. I.e. their role is to 'maintain confidence', i.e. maintain the cash flow to their financers.
2) OFCOM, the 'super regulator' of telecom providers, and of TV companies, under the stewardship of their Blair appointed supremo, seems to do nothing more than legitimise corrupt parctices of their regulatees. If anyone is in any doubt about that, see their response to the clamour that something be done about 0870, 0844, and other non-geographic number scams. Their answer is, basically, that market forces wil sort it.
Bob Reid, Glasgow, U.K.
The UK Premium Rate Industry has been involved in what most would consider fraud for a number of years. It's never been prosecuted by the police.
I note that Opera Telecom, is to contribute £1.5 million to the compensation fund. Over recent tears they have been fined many thousands of pounds by the UK regulators
Look on the Icstis web site at the case from 13 September 2006.
Opera Telecom were fined £30,000 for their part in sending 60,043 unsolicited reverse billed text messages costing 50p each. The messages told the recipients:
"Update: Your services have been modified. Please turn the handset off, then back on, for any changes to take effectâ".
Most people would consider this blatant theft. Why didn't Icstis report it to the police.
Brin, London, UK
Interesting that people will have to claim to get their money back. Is Opera or ITV going to provide a premium number for this?
Rosie, Upminster,
What a rip-off from GM-TV, go on their website and they want proof - who retains their phone bill back 2,3 or even 4 years AND they dont even have records for telephone entries made by landline between 3rd August 2003 and 30th September 2004 - sao wont pay you then.
So even if you have the records the chances are you cant claim - what a con, GMTV have basically made it as difficult as possible to claim so you wont bother.
It is about time the regulator made a draconian example out of them, this is fraud
Jonathan, Exeter, UK
I agree, the company should be prosecuted. I suggest that the PM, Gordon Brown, is emailed with a reminder of his promises on election to the Office of PM.
Alan, Llanerchymedd, Wales UK
I am truly amazed at the millions of gullible people who take part in these mostly stupid competitions with the exorbitant rip off telephone costs. With the loss of this lucrative income it may be that a few of the television channels will be forced off the air.
Thomas Stallwood, Malaga, Spain
The ability to prosecute depends on the competence of the Police and the CPS. The inability to competently launch criminally prosecutions for the many railway disasters and the Steven Lawrence murder suggests that a prosecution won't be forthcoming. Paul Corley has obviously accepted responsibility having resigned.
imj, Abu Dhabi, uae
According to GMTV and Opera's statements, there was no fraud. Opera management were telling GMTV management everything was being done properly, right up until just before the Panorama programme. It then turned out some "junior" Opera employees were finalising the list of potential winners well before lines closed. Stupid? Yes. Bad management? Yes? Fraud? That's not so clear. Some of the other TV competition fiascoes, where management apparently knew callers has no chance of winning, well...
Patrick, London, UK
Given the small individual amounts and the difficulties in claiming and obtaining refunds why do GMTV/ITV not just donate £35,000,000 to say the ten top charities nominated by viewers on a free phone in/email vote.
In addition they should have a free competition for ALL the people who vote.
Bob, Bacup, Lancashire
Ed from Cheshire - I absolutely agree with you. But the police can't start a formal investigation until a member of the public makes an official complait. (Just like the Scottish MP did who started the "cash for honours" investigation.) Maybe you should be the person to do so (perhaps on behalf of your sister).
Andrew, Epsom, Surrey, UK
Dear Ed, Cheshire, UK
You are absolutely right. I have been the victim of fraud by my accountant. (company folded as a result). Getting police, CPS involved only worked because I kept up pressure on them.
Your post said 'the Fraud Act is a very concise piece of legislation' but getting police action VERY difficult - too complicated for the average copper. So, following your post, I looked up the Serious Fraud Office site and, as you say, the definitions are very clear. The SFO is now interested to get involved because they believe there may be other, bigger, issues to investigate. Tip of the iceberg?
I was bogged down with police inactivity and your post was just what I needed to find another route.
Thanks,
Michael
Michael, Eastleigh, UK
This is cynical and incidious, not to mention both fraudulent and corrupt. GMTV has systematically preyed on people who have bought into their bland and addictive formula, that presents itself in people's homes in such an intimate "you can trust us" kind of way. Many of the victims will be the very ones who cannot afford to throw their money away at all so to purposely dupe these people by enticing them to chase an unattainable rainbow is nothing short of criminal. They should be made to pay every penny that they have made from this back as well as a large fine, either to those who claim, with the remainder to charity.
J Raybaud, Bolton, UK
Ed, I don't know either. Perhaps you should ask: (a) the Crown Prosecution Service (b) the fundraiser (c) your local MP
Bill, London,
I agree with Ed. This is clearly fraud - Are the Police investigating ? Unfortunately its up to the Crown Prosecution Service to decide if a prosecution should go ahead. Any bets that, even with the overwhelming evidence, they will decide that prosecution is 'not in the public interest'. I would be interested in finding out the relation between Mr Corley's salary and the amount these phone calls earned for the company.
Riley, Kiev, Ukraine
I still don't understand why no one has been prosecuted for this - section 2 of the Fraud Act 2006 is shown below;
Fraud by false representation
(1) A person is in breach of this section if he-
(a) dishonestly makes a false representation, and
(b) intends, by making the representation-
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
(2) A representation is false if-
(a) it is untrue or misleading, and
(b) the person making it knows that it is, or might be, untrue or misleading
So just because TV executives are involved they are automatically exempt from the law? Idiots (like my sister) who spent hundreds of pounds entering these competitions over several years were victims of fraud. Imprisonment - not resignation - is the correct punishment. The fraud Act is a very concise piece of legislation and it's very clear that a police investigation is overdue.
Ed, Cheshire, UK