The Australian Competition and Consumer Commission (ACCC) has taken court action against two overseas-based companies for alleged misleading advertising of mobile telephone premium services in Australian youth magazines.
The legal proceedings have been targeted at AMV Holdings Ltd, based in the UK, and Teracomm Limited, based in Bulgaria.
The ACCC has accused both companies of breaching the Trade Practices Act 1974 and raises significant concerns over their advertising practices.
“The ACCC is concerned that the overall impression created by the attractive and busy layout of some advertisements for mobile premium services appearing in youth magazines, combined with the inadequate and inappropriate use of fine print disclaimers, is likely to be misleading in breach of the Act,” commented the ACCC in a statement.
It was also raised that the advertising failed to adequately disclose the nature of the service and therefore many consumers would be unknowingly subscribing to services they do not wish to receive.
“Young, unsophisticated readers are costing themselves or their parents a lot of money by unwittingly signing up to these services. Advertisers must not rely on minute fine print to disclose important terms and conditions. The costs and nature of the services must be prominently and clearly identifiable within the advertisement, particularly when it is targeting young people,” ACCC chairman, Graeme Samuel, said.
To address the concerns Pacific Magazines and ACP Magazines cooperated and provided enforceable undertakings to improve the standards of advertising for these services.
Advertisements must now clearly state that the service is a subscription service, the cost of the service and the eligibility of consumers to receive the benefit of the services.
Both publishers are also required to publish articles to inform readers about the nature of the services advertised in their magazines.
The ACCC has further emphasised that it will continue to monitor advertisements promoting mobile premium services, and will take action against all that are misleading or deceptive.