A St Leonards firm that runs competitions in national newspapers has been fined £800,000.
Churchcastle Ltd was given the penalty by PhonepayPlus, the regulator for premium-rate phone lines, after some entrants discovered that they had run up hundreds of pounds in phone bills.
PhonepayPlus said it was particularly concerned elderly people had been taken advantage of.
The competitions, such as word searches, featured in 50 publications.
Consumers completed them in order to be entered into premium rate prize draws for large cash prizes or jewellery.
They had to give contact details and received letters suggesting they were close to winning a prize and should call to claim it.
The cost of entering the competitions varied between 10p per minute from a BT landline for initial promotions or stages to £1.53 per minute.
The length of calls varied from just under three minutes to six minutes and 55 seconds.
Most of the money spent on the call went to Churchcastle Ltd and the regulator said the rate was usually hidden in the small print.
PhonepayPlus added in many cases it was alerted by people looking after elderly relatives, the majority of whom were aged over 80, who had discovered their phone bills were hundreds of pounds higher than usual.
PhonepayPlus said it had received 15 complaints regarding the company since September 2011.
Paul Whiting, its chief executive, said: “A great deal of money was taken from vulnerable people. We are saddened that elderly consumers have been misled in this cynical way.
“PhonepayPlus will not tolerate any misleading activity that takes advantage of vulnerable people and we encourage anybody who is concerned about an elderly relative’s use of premium rate services to contact us or check our website for advice at www.phonepayplus.org.uk.”
The Observer was unable to reach Churchcastle Ltd at the time of publication.
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