ACP and PacMags in ACCC hot water over dodgy mobile ads
The ACCC has obtained undertakings from publishers ACP and Pacific Magazines regarding their future conduct over ads for premium mobile phone services carried in their titles.
The revelation came from Graeme Samuel, chairman of the Australian Competition and Consumer Commission in a speech to the Australian Telecommunications Users Group.
He said the ACCC had instituted legal proceedings against two advertisers “for alleged misleading and deceptive advertisements for mobile premium services in the youth magazines Dolly, Girlfriend and TV Hits.” Dolly is published by ACP, while PacMags publishes Girlfriend and TV Hits.
He added: “Publishers should also note: they too may be liable for running ads which they know are misleading or deceptive. The ACCC recently obtained enforceable undertakings from Pacific Magazines and ACP Magazines who publish these youth magazines.”
Both publishers have agreed that all the ads they carry for mobile premium services must:
- State that the service is a subscription service
- The cost of the service
- The eligibility of consumers to receive the benefit of these services
- Where this information is revealed in the relevant terms and conditions of the services.
Samuel said:
“A particular concern is that the target audience of such magazines may be young, unsophisticated readers who unwittingly cost themselves or their parents a lot of money by signing up to these services. The advertisements often have attractive and busy layouts and have inadequate or inappropriate use of fine print disclaimers.”
The services include ringtones, news, horoscopes and games and competitions. On many occasions those who respond do not realise they are committing themselves to an ongoing, expensive subscription.
He added that ACP and PacMags “are also going to run an article in these magazines to inform their readers of the nature, cost and characteristics of mobile premium services.”
Ads for the premium services are also a staple of subscription and late night free TV.
Samuel said that telcos that sold on access to smaller players also bore responsibility for dodgy practices.
He said: “Problems such as misleading advertising, unfair contracts and deceptive mobile phone competitions have been allowed to proliferate by service providers, publishers and carriers, who have turned a blind eye while taking a slice of the profits.
“It is no longer acceptable for carriers to wash their hands of responsibility as operators use their networks to entrap phone company customers with unwanted, expensive and difficult to unwind subscription services.”
The telco sector is the most complained about to the ACCC by the public, with around 4,000 complaints per year. He said the ACCC is currently involved in 12 “active and major investigations”.
He said: “The ACCC is drawing a line in the sand – we’re saying to the poor performers, and there are many of them, mend your ways.
“There is an important distinction to be made however between what can be identified as puffery and what is squarely in the realms of misleading and deceptive conduct. Unfortunately we’ve become accustomed to sorting wheat from chaff in much advertising, but there is a significant volume of conduct which it would appear is intended to deceive and entrap – and that’s illegal.”
He said: “Advertisements that feature busy, distracting visuals and hard-to-read fine print raise significant concerns in any industry. However, they are far too common when it comes to advertising mobile premium services. Advertisements of this type seem to be designed to confuse consumers about what they are getting when they send in their text message. Ultimately, many are misled into signing up for a costly ongoing subscription service. ”
He said: “Sometimes, some of these misleading impressions come about simply through lack of care. But some behaviour is so deceitful and deleterious; it can only be described as a scam. Random, unsolicited offers that consumers receive for “free” or low cost ring tones are often nothing more than a trap to lock consumers into an ongoing subscription service at premium rates, from which consumers have difficulty unsubscribing.”
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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It would be great if the ACCC actually did something to address this issue. This has been an ongoing problem for a long time, catching many unsuspecting people out and costing them hundreds of dollars. A few years ago when I worked in a Telstra Shop it was surprising to come across so many people who had been charged substantial fees from these things. They would complain to Telstra because they had no idea who was charging them. There should be greater transparency for these businesses that generate profit from subscription services.
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I’ve been stung twice by these. My daughter has inadvertently subscribed thinking she was entering a contest to win an iphone. Apparently she signed up for I Q Tests which is ridiculous as she has no interest. Disputing the bill with the scum-bag companies running the comps is nigh-on impossible. They should be illegal.
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What about the TV ads? None of them show the terms and conditions clearly or for long enough. You’d need to pause the TV and sit in front of it with a magnifying glass to read and understand them fully.
I asked Free TV Australia how these advertisers could get away with advertising to kids (eg. the ring tone that’s too high pitched for adults to hear) during such shows as Video Hits on Saturday afternoon, and was told this was fine because the timeslot wasn’t C classified. Come on! Video Hits clearly has a high youth audience!
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