The company behind the Richard and Judy premium rate telephone quiz scandal has been fined £150,000.Premium rate services regulator Icstis imposed the record penalty on Eckoh UK Ltd after an investigation into the Channel 4 show.
It found viewers were urged to call its You Say, We Pay quiz after potential winners had been chosen, showing a "reckless disregard" for TV viewers.
Icstis is referring the case to media regulator Ofcom.
The watchdog has indicated it may wish to investigate the actions of the parties involved under the Ofcom Broadcasting Code.
Icstis also ordered a sanction to provide refunds to all those affected.
But Eckoh complained that it had been made a "scapegoat" and that it would consider appealing.
'Fundamental failings'
Icstis chairman Sir Alistair Graham said the size of the fine reflected the "very serious nature" of the breach of its Code of Practice.
"The hearing panel found clear evidence of fundamental failings in the winner selection process.
"Winners were being chosen before the competition closing deadline, whilst millions of additional viewers were still encouraged to phone in and pay to enter the competition but were denied the opportunity of fair consideration.
"Such reckless disregard for viewers is unacceptable. In this case, viewers were not only 'paying competition entrants' but also consumers who enjoy a high degree of consumer protection already provided by Icstis."
He added: "The public should be able to use these services with absolute confidence."
Icstis said that almost five million viewers entered the competition at a cost of £1 per call.
But 47% of calls were received after the shortlist of winners had already been chosen. Production company Cactus were responsible for choosing potential winners.
We are extremely sorry for anyone who entered the competition and were not dealt with appropriately.
Nik Philpot, Eckoh
A Channel 4 spokesman said it was shocked to learn that management at Eckoh were aware the competition was not being operated properly six months before the problems were made public.
The spokesman said: "We engaged Eckoh in good faith as a reputable and experienced service provider and we are very disappointed by their failure to ensure that all calls to the competition were handled properly."
Channel 4 said it has since introduced a new monitoring regime to audit the performance of service providers on its remaining phone-in competitions.
'Misled the public'
Eckoh spokesperson Harry Chathli said: "Icstis accepts that Eckoh has learnt from this case, but nonetheless has imposed this sanction 'to provide incentive to other service providers who may not yet have taken the steps that Eckoh have to ensure compliance'.
"Because of this we can't help but feel that we've been made a scapegoat and we will be considering an appeal once we have seen the result of the Ofcom investigation."
Eckoh said the regulations governing premium rate services were "fundamentally flawed".
In a statement the company said: "Under the current Icstis Code of Practice, the service provider is exclusively responsible for any breaches of compliance, irrespective of who is actually responsible or how this came about. It is for this reason that only Eckoh has been fined today.
"Information providers, in this case Channel 4 and Cactus, are outside the jurisdiction of Icstis and it is unable to take action against them unless they agree."
"In our view where a television programme has misled the public in promoting calls to a premium rate service it would seem appropriate that either the broadcaster or production company, or both, should also be brought before the regulator."
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