ACCC sues premium service provider
It’s up to the Federal Court to decide on the ACCC’s recently filed legal action against premium service provider TMG Asia Pacific Pty Ltd.
I can only say that I’m pleased that this area of the telco industry is coming under the spotlight. It’s a disgrace that so many dodgy operators get away with so much. And a disgrace that the mobile network operators haven’t done whatever it takes to rein them in.
I’ll be following this case as it develops in court.
The TMG case
The ACCC alleges that TMG ran SMS-based promotions where television viewers could enter to win a prize by SMSing a response to TMG’s 194060 number, but they weren’t clearly told:
- By responding, they were ‘joining’ the competition and paying a $5 joining fee.
- They were also ‘agreeing’ to answer up to ten quiz questions with a $5 charge attached to each.
- Participating also meant ‘agreeing’ up to a subscription quiz of six SMSes per month at $5 each.
- ACT, Victoria and Queensland residents could enter and pay, but couldn’t win the prize.
It seems likely that entrants weren’t clearly told those things
Who in their right mind would enter a competition if those terms were clear ? If there were any entries at all from ACT, Victoria or Queensland, it’s hard to see how TMG can argue their small print was clear enough.
What the ACCC is asking for
The ACCC wants the court to order:
- declarations that TMG engaged in misleading and deceptive conduct
- injunctions to stop TMG from engaging in similar conduct in the future
- TMG to pay for and arrange corrective advertisements on television
- that TMG implement a trade practices law compliance program, and
- that TMG pays the ACCC’s costs.
Next move
The case has just started. It’s scheduled for a preliminary court hearing in Sydney on 17 September 2008.
TMG should know what’s required
Web searches disclose that:
- TMG Asia Pacific Pty Ltd is an Australian-registered company.
- In 2007, a company by the same name was the subject of action by New Zealand’s Commerce Commission for ‘alleged breach of s11, 13(b), (g) and (i) of the Fair Trading Act for failure to disclose terms and conditions of mobile text to win competitions.’
- According to the Commerce Commission, ‘Complaints suggest consumers were not aware that they were both entering a promotion and subscribing to a service when they texted to 8555. They appear not to have known that they would be charged $3 for each subsequent text they received, that this would cost them up to $15 per month or that the service would continue unless they texted STOP.’
- The Commerce Commission reported that ‘TMG ceased advertising in New Zealand pending discussions with the Commission. As a result, the Commission withdrew its application for an interim injunction.’
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