Channel 4 was fined £1.5 million by the broadcasting watchdog Ofcom after it emerged that executives knew that viewers were entering phone-in competitions they could not win.

In Deal or No Deal, presented by Noel Edmonds, viewers entering the competition did not have a fair or equal chance to win because of a “staggered selection process” for choosing entrants. Ofcom said it was concerned that when Channel 4 became aware of the problem, its senior management decided to continue running the competition while an alternative method was devised.

The regulator said: “The licensee was therefore conducting a competition which it knew to be unfair, which compounded substantially the seriousness of the breaches.” The regulator also demanded further evidence from ITV that it had exposed all cases of sham votes after the admission that viewers were duped in shows that were presented by Ant and Dec.

Ed Richards, the Ofcom chief executive, said that the regulator would continue to take “strong action” against broadcasters, who are keen to draw a line under a year of scandal.

Ofcom imposed fines of £1 million for irregularities in theRichard & Judy You Say We Pay competition and £500,000 for Deal or No Deal. The Channel 4 fine is the second-largest imposed, after the £2 million sanction against GMTV. Finalists for the Richard and Judy quiz were picked before lines closed. Ofcom found that Channel 4 made £25.24 million in revenue from around 17.75 million calls during the period under investigation.

Channel 4 has been instructed to broadcast a summary of Ofcom’s findings on three separate occasions. Both quizzes, which used premium-rate numbers, have been dropped. Channel 4 has paid out £82,000 in refunds since the scams were exposed, but will now pay £600,000 to charity, double the figure previously pledged to Great Ormond Street Hospital for Children.

In a letter to James Purnell, the Culture Secretary, Mr Richards said that Ofcom was seeking more information from ITV, including details of the X Factor final vote, which prompted 2,500 complaints from viewers.

The regulator asked ITV for assurance that Deloitte, the consultancy hired to audit the company’s shows, was able to undertake an “exhaustive review” of all programmes that used premium rate phone-ins. The Deloitte report exposed irregularities in shows including X Factor, Ant and Dec’s Gameshow Marathon and I’m a Celebrity . . . Get Me Out of Here!

ITV would release only edited portions of the Deloitte report. Ofcom has demanded to see the full findings.

Mr Richards said that Ofcom wanted to amend the licences of commercial broadcasters to add a specific protection for viewers taking part in contests. Ofcom said that the Channel 4 cases involved the “widespread and systematic deception of all those viewers who paid to enter in the belief that they had a fair chance of winning when, in fact, their chances of winning were diminished or non-existent”.

Channel 4 “failed to have any proper regard for the necessity to operate any effective form of compliance procedures for the operation of the competition”. The broadcaster said that it would sue the telephony company Eckoh, claiming it knew that the You Say We Pay competition was run in a noncompliant fashion, but took no steps to rectify the problems or bring them to Channel 4’s attention. A spokesman for Eckoh said: “We believe the ruling to be fair. If Channel 4 wishes to proceed with a legal action, we will robustly defend our position.”

Channel 4 announced it was shutting all “for-profit” premium-rate competitions. Ofcom has also fined the BBC £50,000 over Blue Peter and Five £300,000 over its Brainteaser quiz.

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