The Australian Competition and Consumer Commission has obtained orders by consent in the Federal Court in Sydney from TMG Asia Pacific Pty Ltd for false, misleading and deceptive conduct in advertising its premium rate mobile subscription quiz services.
The ACCC alleged that in its television advertisements "Cash Cup", "Mac Air"* and "Shell Game", TMG failed to adequately disclose the costs and other terms associated with its 'Text and Win' mobile premium services**, and that this misled consumers.
The advertisements offered viewers a chance at winning a prize by texting in a response to TMG's 194060 number. However, it was alleged that the television advertisements did not adequately inform consumers that by responding they would be signed up to an ongoing subscription service charged at premium rates.
The TMG advertisements also failed to state that prizes could not be awarded to residents of the ACT, Victoria and Queensland even though they would be charged for entering the competition.
As well as declaring that TMG's conduct had contravened sections 52 and 53(e) and (g) of the Trade Practices Act 1974, the court also made orders:
- restraining TMG from engaging in similar conduct for three years
- requiring TMG to publish a corrective advertisement on television informing consumers that the advertisments in question were misleading
- requiring TMG to implement a trade practices compliance program, and
- that TMG pay the ACCC's agreed costs.
ACCC Chairman, Mr Graeme Samuel, while acknowledging TMG's prompt cooperation in settling the matter, 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."
Resulting from a separate investigation, TMG and its parent company based in the Netherlands, The Mobile Generation I BV also provided a court-enforceable undertaking to the ACCC regarding an internet pop-up used to promote a Wixawin SMS quiz. The pop-up featured a Woolworths $500 Wishcard as a prize.
The ACCC had alleged that the use of the distinctive Woolworths logo, the fine print disclaimers and lack of clear information on who was eligible to enter were likely to have misled consumers. Consumers who complained to the ACCC after responding believed that they were entering a Woolworths promotion and were not aware that they were potentially signing up to an ongoing premium rate mobile subscription service.
Consumers who were residents of the ACT, Victoria and Queensland were again ineligible for a prize even though they would be charged for entering the competition.
Building on the court orders obtained for the television advertisments, TMG and TMG I BV have agreed as part of their undertaking to clearly communicate to consumers the terms and conditions for its mobile services including cost as well as:
- who is eligible to enter
- the nature of the services being provided, and
- who the services are being provided by.
"All in all this was a good result," Mr Samuel said. "This action should also send out a clear message to other players in the industry. If you advertise a mobile premium service consumers need to be properly informed as to the cost and nature of your service."
The ACCC in conjunction with the Australian Communications and Media Authority has released a fact sheet on mobile premium services for consumers wanting to find out more about these services and how best to protect themselves from unwanted high phone bills. Your consumer rights: Mobile phone premium services is available on the ACCC website www.accc.gov.au.