The ACCC has once again hit out at misleading SMS competitions and highlighted two major Federal Court proceedings against dodgy service providers.
Acting ACCC chairman, Peter Kell, expressed that the watchdog has had enough with misleading premium mobile services advertising.
“The ACCC issued warnings earlier this year to the industry; clean up your act or face the consequences. We’ve kept our word – we are taking action, as demonstrated by two recent initiated Federal Court actions,” he said.
The first proceeding was with AMV Holding Limited, a company based in the UK, and determined that its advertisements in Dolly, Girlfriend and TV Hits magazines were misleading.
Kell highlighted that its busy layout, inadequate and inappropriate use of fine print disclaimers is in breach of the Trade Practices Act 1974.
It was also mentioned that the nature of the service was not adequately disclosed to the consumer and this will no longer be tolerated by the ACCC.
“Preying on unsuspecting consumers, especially youth, is simply unacceptable and will not be tolerated,” he said.
“The action against AMV demonstrates that no matter where a company is based, the ACCC will take action to protect Australian consumers.”
The separate proceeding that occurred this week was in relation the interim injunction against Clarion Marketing Australia Pty Ltd.
According to the ACCC the company distributed millions of scratch cards in popular magazines including New Weekly, Zoo, TV Week and major newspapers.
Kell highlighted that the scratch cards prompted consumers to SMS a code to a phone number in order to claim a prize, but they unknowingly subscribed to a subscription service that ended up costing $10 every six days.
The court injunction requires Clarion to send a free SMS to consumers by Friday 19 June, who attempt to claim a prize and notify them of the cost of the purchase.
The ACCC has also filed proceedings in the Federal Court against Clarion seeking declaration that publishing the scratch cards was misleading and deceptive.
“Misleading marketing is threatening to bring the reputation of the Australian telecommunications industry – including content providers, aggregators and telcos – into disrepute. Consumers are frustrated and have had enough of being duped by misleading advertisements for expensive mobile subscription services,” he said.
“The ACCC has acted swiftly and decisively in response to potentially misleading advertisements. We are closely monitoring SMS advertisements, and if you mislead consumers then you are subject to the full weight of the law.”