Nine to pay over $600,000 following excessive surcharges
Subsidiaries of Nine Entertainment Co have paid $159,840 in penalties in response to infringement notices issued by the Australian Competition and Consumer Commission (ACCC) for allegedly charging subscribers and advertisers excessive payment surcharges.
The ACCC revealed that six subsidiaries of Nine were issued with notices for alleged offenses dating back to December 2018 when Nine merged with Fairfax Media.
At that time, Nine applied payment surcharges to digital and home delivery subscription services as well as radio, publishing, TV and digital advertising. Nine has since undertaken steps to rectify the matter with customers and advertisers, including removing surcharges for Visa Debit and Mastercard Debit cards for all subscription payments.
The ACCC expressed concern that most subscriber and advertiser transactions with a surcharge included an “excessive payment surcharge”.
Nine is set to reimburse a credit for most customers to make up for the total average excess surcharge, which Mumbrella understands in most cases is around $2 per subscriber. The ACCC revealed this will total approximately $450,000 in consumer redress to eligible advertising, home delivery and digital subscription customers.
The infringement notices specifically related to payments made using Mastercard and Visa debit cards between August and December of 2020, where surcharges were between 0.9% and 1.55%, with the ACCC alleging they exceeded the actual cost to Nine by between 0.09% 0.84%.
The ACCC’s infringement notices were originally issued to Fairfax Media Management Pty Ltd (relating to subscription services), Nine Radio Operations Pty Ltd (relating to radio advertising services), Fairfax Media Publications Pty Ltd (relating to the publication of advertising), and NBN Pty Ltd, Nine Digital Pty Ltd and Nine Network Australia Pty Ltd (in relation to TV and digital advertising services).
ACCC deputy chair, Mick Keogh, said: “A payment surcharge is excessive and in breach of the law if it exceeds the costs to the business of processing the payment.
“While the average over-charge per consumer was relatively small, given the number of transactions processed by Nine, this added up to a significant amount.”
“This should serve as a reminder to businesses that the ACCC will continue to investigate complaints about businesses imposing excessive payment surcharges.”
The ACCC revealed that around 220,000 digital and home delivery subscribers will receive a one-off cash adjustment of $1.92, or an extension to their subscription. Nine will contact affected advertising customers as well.
Nine has amended its payment surcharges, removing a surcharge for Visa Debit and Mastercard Debit subscription payments, as well as reducing the surcharge to a maximum of 0.5% for all Visa Credit and Mastercard Credit subscription payments.
A spokesperson for Nine said: “We accept the findings of the ACCC in this matter and have paid the fine. The surcharge overcharge was unintentional, it was not an error which affected all of Nine (for example, Stan and Future Women were not affected) and we have taken steps to credit those subscribers and advertisers impacted.
“We have also reviewed our processes to ensure the error is not repeated.”
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Zanda Wilson was a reporter and podcast producer at Mumbrella, specialising in radio reporting. He left Mumbrella in September 2021.
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