Saturday, August 22, 2009

Australia: the regulator has acted to end misleading adverts for mobile premium services aimed at young people

[accc] Young consumers are better protected from misleading mobile premium service (MPS) promotions following Australian Competition and Consumer Commission action.

"The ACCC has been successful in putting an end to many misleading MPS promotions which were directly targeted at young consumers," ACCC chairman Graeme Samuel said.

As a result of the ACCC's work, the Federal Court yesterday declared Teracomm Limited, a Bulgarian MPS content provider, had engaged in misleading advertising.

Teracomm was advertising services such as 'love calculator', 'cheat meter' and 'celebrity soul mate'.

The court found Teracomm's advertisements placed in Dolly magazine in May, June and July 2008 were misleading because they did not clearly show the nature of the service being offered and their costs.

Justice Moore found "the customer would not be obtaining content on a one off basis, but rather would be subscribing to a service for which a weekly fee would be charged until the service was terminated."

The court also found that using the word 'subscribe' in fine print at the foot of the advertisement "did not disclose that the service was a subscription service."

The subscription service had an initial sign-up fee of $3 and a subscription fee of between $9-$12 per week.

Mr Samuel said this action demonstrates the lengths the ACCC will go to protect youth from misleading MPS advertising.

"It is simple, if you advertise in Australia than you must follow Australian laws. The ACCC will not be deterred from going after overseas based companies that are doing the wrong thing by Australian consumers."

Earlier this year the ACCC was successful in a similar action against a UK based company AMV Holdings Pty Ltd. The court declared, by consent, that AMV's advertisements in Dolly, Girlfriend and TV hits magazines were misleading.

In February 2009 both ACP Magazines which publishes Dolly and Pacific Magazines which publishes Girlfriend and TV Hits magazines provided the ACCC with court enforceable undertakings that they would not publish advertisements unless they clearly and prominently state the nature, cost and any eligibility requirements of receiving the service.

The ACCC currently has proceedings before the Federal Court in relation to MPS scratch card promotions by Star Promotions Club Pty Ltd and Clarion Marketing Australia Pty Ltd.

The ACCC and other agencies often receive complaints from people who didn't know they were subscribing to an ongoing premium service. To assist consumers the ACCC and the Australian Communications Media Authority have published a MPS fact sheet for consumers. The fact sheet is available via the ACCC website.

ACCC protects youth from misleading mobile premium service promotions

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