A company has been forced to change its use of pop-up advertisements by the Office of Fair Trading (OFT), which investigated the company's practices under legislation protecting consumers against unfair contracts.
Micro Bill Systems Ltd has agreed to reduce drastically its use of pop-up advertisements in pursuit of payment from consumers. It has also agreed to make it clearer to users of its services that these adverts will appear.
Micro Bill Systems provides paid-for membership to websites containing adult content. Its system flooded consumers' computer screens with pop-up ads asking for payment if a new account was not cancelled within three days.
The OFT said that the ads covered much of the screen and were often locked open, meaning that the computer could not be used for any other function.
When signing up, consumers download the software that serves the pop up ads, but the OFT found that consumers were not always aware that they were entering into a contract, and that they had agreed to download the software.
The OFT said that the company had now agreed to "provide information about how consumers can have the 'pop-up' generating software uninstalled at any time … make it clear in the sign-up process that the consumer is entering into a contract, and … make it clear in the sign-up process that 'pop-up' bills will appear on consumers' computers when payment becomes due or is outstanding".
If Micro Bill Systems breaks the agreements it has made the OFT can seek a court injunction against it, it said.
The company's terms and conditions told consumers what would happen once they subscribed through its system, and pop up ads are not in themselves illegal or unfair, said the OFT.
It investigated Micro Bill Systems, though, under the Unfair Terms in Consumer Contracts Regulations (UTCCRs), which say that a term is 'unfair' if it heavily favours a company at the expense of a consumer.
"The main issue considered by the OFT was the fairness of the process by which consumers were signed up to the contract and the effects of billing system and automated 'pop-ups'," said the OFT.
Micro Bill Systems agreed to limit the number of pop ups served on a consumer to 20, with no more than one appearing in any 24 hour period; restrict the locked-open eriod of any ad to 60 seconds, and inform consumers how they can uninstall the software that generates the ads.
A new company, Platte International Limited, will now take over Micro Bill's operations. The OFT said that the new company had also given it undertakings.