Misleading SMS ads get slapped down in Australia

Australia’s Competition and Consumer Commission (ACCC) has targeted two companies it claims are misleading consumers using SMS. The ACCC won a court order against UK company AMV Holdings Limited for misleading adverts in magazines, and had an interim injunction leveled against Clarion Marketing Australia for hiding the costs of SMS subscription services.

AMV Holdings Limited was successfully brought to court for misleading ads in magazines. The ACCC claims that it was using confusing layouts to hide the details of a subscription service – with the effect that many consumers who thought they were purchasing a once-off piece of content were unwittingly getting signed up for paid subscription services.

Clarion Marketing Australia is also accused of signing people up for services without their knowledge, using scratch cards distributed with magazines. Customers who “won” something with the card had to send an SMS to a shortcode to claim the prize. Once that SMS was sent, the customer found themselves subscribed to a premium SMS service that charges $10 every six days. The injunction placed on Clarion Marketing forces them to send a text to any new subscriber, clearly informing them about the subscription and giving them the contacts necessary to cancel it.

From the story:

Acting ACCC Chairman, Mr Peter Kell: “The busy layout of the advertisements appearing in youth magazines, combined with the inadequate and inappropriate use of fine print disclaimers, is misleading… of particular concern was that the advertising did not adequately disclose the nature of the services being offered and their costs. Consumers would unknowingly be subscribing to an ongoing and costly service rather than acquiring a one-off purchase of a particular ring-tone, wallpaper or game.”

What we think?

I can’t tell you how angry stories like this make me. Every customer who gets stung by an operation like this is incredibly unlikely to ever return to mobile commerce. For a transient gain, a potential customer is ruined for everone else. Grrr.

About Cian O' Sullivan

Ace reporter, Cian, has moved on from GoMo News. He is currently the office manager for Photocall Ireland - Ireland's premier news and PR photography agency. You can check out the site at www.photocallireland.com. If you want to contact him directly about anything, Cian's new email is cian at photocallireland dot com.
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