ITV's Deloitte report into premium rate phone-in scandals ... problems with up to 10m calls to major entertainment shows .. Report described as a "bloodbath" .. the number of programmes affected and the wide range of errors have shocked ITV... from callers not being able to enter competitions ... to miscounts and calls not being processed.
10m calls .. with the caller having no chance of winning premium-rate competitions ... ITV declined to comment.
The total level of call fraud - in addition to the GMTV fraud - is 7.8 million. Michael Grade has offered refunds.
Media Guardian reports - 'Serious editorial issues' with Soapstar Superstar, Ant and Dec's Saturday Night Takeaway and Ant and Dec's Gameshow Marathon. ITV expecting an 18m bill in total for call-TV problems
If you were mugged in the street, would you simply accept getting your money back and the attacker let off, or would you demand your money back, compensation, retribution or all three?
Soapstar Superstar - 5 Jan 07 - Call/Text/Sky/Cable - refund 60p
Ant and Dec's Saturday Night Take Away - Series 2 - refund 99p
Series 3 - refund 1.14, Series 4 - refund 1.00 - series 5 - refund 98p
Chrismas Special 05 - refund 1.10, Series 6 - calls 1.10, text 1.32 Ant and Dec Gameshow Marathon - redund calls 1.10 text 1.32 I'm a Celeb 06 - text refund 60p X Factor 05 - text refund 45p - 06 text refund 45p ITV Play on ITV2+1 - ALL COMPETIONS BETWEEN 12 Dec 06 and 16 Aug 07 - 85p per call
ITV Executive Chairman Michael Grade today published the Findings of the Deloitte Review and ITV Investigation into premium rate services (PRS) within ITV programmes and announced a tough package of new measures to address the issues raised.
On March 5th 2007 ITV announced the immediate suspension of all PRS activity, following concerns raised over the use of PRS, and appointed Deloitte to carry out an independent review of PRS in ITV programming.
The review was conducted in three phases: first, a review of PRS procedures in all current programming, ensuring that all relevant programmes currently on air have benefited from the Deloitte process; second, identifying processes and controls that could be put in place to reduce the risk of failures arising in the future; and third, an investigation to establish the nature and scale of any incidents relating to the provision of PRS which have occurred in ITV programmes from 1 April 2005 to 31 March 2007.
During this thorough and independent process Deloitte has considered information relating to PRS in ITV series and all relevant internal and external suppliers have
Out of more than 60 ITV series reviewed, serious editorial issues have been identified in three ITV programmes: Soapstar Superstar 2007; Ant and Decs
Saturday Night Takeaway 2005 and 2006; and Ant and Decs Gameshow Marathon 2005. As we announced on 21st September, The British Comedy Awards 2005 is the subject of a separate investigation by media law firm Olswang.
The Deloitte review also highlighted serious technical issues around the use of red button for voting and the late arrival of SMS text votes on five occasions affecting two ITV shows, including the X Factor final 2005. On none of these occasions did the problems alter the actual outcome of those votes.
The review identified key areas of failure in the way in which ITV integrated PRS into
Programme producers, staff and supporting companies did not always recognise or respect the impact of editorial actions on the integrity of interactive elements;
Lack of agreed and consistently applied procedures, controls and ways of working between the many parties involved in the process; and
Supporting technology, in the most part supplied by third party suppliers, lacking the reliability and resilience consistently to deliver the required level of service.
Commenting on the reviews findings, Michael Grade said: Today marks a major milestone in our efforts to restore public trust and put our house in order after a series of events that have affected not just us, but the entire broadcasting industry.
When allegations around premium rate services in ITV programmes first emerged in March, we took immediate action. We suspended all premium rate services and
appointed Deloitte to come in and review our procedures and then to undertake a thorough review of the previous two years activity in this area. Since March any
programme that uses PRS has had to implement and adhere to the new procedures put in place as a result. This is working very well.
I knew when I commissioned this work that it might make for deeply uncomfortable reading. But it has been a necessary and vital process. It is only by understanding how things went wrong in the past, and being open about them, that we can be sure
that we get them right now and in the future. The purpose of the review wasnt limited to flushing out the problems and learning the lessons. We have used it to
assess viewers losses, so that we can reimburse them.
We have today announced a comprehensive scheme to reimburse affected consumers. Any unclaimed amounts will be donated to charity. My overall conclusion from the review is that there was a serious cultural failure within ITV. The fundamental failure was in not recognising the impact of PRS on existing editorial processes. The Ayre report on PRS put this very succinctly, and I quote:
broadcasters often ignored the fact that viewers had entered in to an additional transaction entitling them to an extra service they paid extra for.
The Deloitte review shows that, like other broadcasters, ITV fell into that trap. While the company saw interactivity as attractive to viewers, and PRS revenues as valuable additional revenue, it missed the fact that with it came obligations as well as opportunities. It was not understood that when the audience is invited to make
choices within programmes, the producer is effectively ceding part of his/her sovereignty over editorial decisions.
These failings were not venal. In all cases individuals were motivated by their professional instinct to produce the best show, but they failed to understand that this
could come at the expense of keeping faith with participating viewers. This cultural conflict was compounded by several other factors including: the speed of development of PRS activities; the complexity of the technological factors; the sheer volume of calls; and an extended chain of operational command that existing
compliance procedures failed to keep up with.
As I have made clear on numerous occasions, the relationship of trust between the broadcaster and the audience is paramount. That is why we immediately stopped all interactive services when allegations about an ITV show first emerged. That is why with the help of Deloitte we now have the processes in place to identify and rectify this.
I am also on the record as saying that I take a zero tolerance stance, and that means not tolerating a culture that condones audiences being deliberately misled, or
not getting the service they have been offered. In some instances there has been disciplinary action, but I dont intend to take a couple of token scalps in expiation.
That would not solve the problem. As Ive said, those involved thought they were working to make the best programmes. The effective solution is to change the
culture, to change the systems, to understand the importance of trust. I am absolutely sure that there isnt a person working in or for the company who doesnt
understand now where and why it went wrong. And everyone also knows that a line has been drawn, and that there will be no excuses for ignoring it the consequences will be severe. As I said to the Select Committee earlier this year, now we have the
processes in place it will be a case of one strike and youre out. Thats how we will rebuild trust.
Let me say finally, on behalf of ITV, that we deeply regret what has happened and how sorry we are for breaking trust with our viewers.
In response to the review, ITV today announced a comprehensive reimbursement scheme. Affected consumers will be offered reimbursement, with the right to claim at any time before 29 February 2008 by contacting ITV on Freephone number 0800 028
0180 or via www.ITV.com/competitions. The reimbursement process will be easy to follow and will be well publicised on air by ITV.
ITV recognises that some of this amount may not be reimbursed as it may not be possible to identify or verify all affected individuals in every case; and some potential
claimants may not make a claim.
To address this, the difference between the total potential reimbursement and the actual amount claimed by consumers will be donated to charity. The total potential reimbursement is around 7.8 million, which represents the amount spent by affected consumers and is almost double the amount ITV actually received from these calls.
In addition to reimbursements, ITV today announced a number of significant changes to the operation of PRS within its programming and training processes.
The immediate suspension of all SMS and Red Button voting in live programmes. Only when the network and platform operators can reassure ITV that appropriate systems are in place to ensure delivery of votes in a
timely fashion, will ITV reconsider this position. In the meantime, ITV will continue to offer SMS and Red Button for non-time critical competitions and other interactivity.
Bringing telephony service provision in-house on programmes made by ITV Productions, with an intention to extend that across all programmes broadcast
on ITV. ITV is working with BT to develop a solution to manage interactive service provision in house. ITVs dependency on third party providers will be reduced and the level of control that ITV can exercise over services will significantly increase.
Introduction of relevant and targeted training across the company ensuring that employees are aware of their responsibilities in respect of the operation of interactive services and its integration into programme making. In addition all productions employees will receive broad compliance training on joining the company and will be required to attend refresher training on a regular
ITVs compliance resources are being strengthened with the addition of a dedicated Interactive Governance team to ensure maintenance of industry leading standards and the probity of all interactive services across ITV.
In addition to ITVs commitment to reimburse 7.8 million associated with PRS activity, and to donate any balance of that sum to charity, ITV will also have incurred
costs in the process of approximately 2 million. In the results of ITV for the half year to 30 June 2007, ITV had included, in pre-exceptional operating profit, a charge for
items associated with PRS activity across ITV and GMTV then estimated at 5 million. Subsequently on 26 September 2007 Ofcom announced a fine on GMTV of
2 million. Based on current estimates and before any potential Ofcom fine on ITV, an exceptional operating charge of 18 million associated with PRS activity will be
taken by ITV in the full year 2007 and will include the 5 million pre-exceptional operating charge taken at the half year.