Marketing « Australian Regulatory Compliance Review from Langes+ Lawyers

April 26, 2013

Case note: unconscionable conduct by mobile phone provider

In Australian Competition and Consumer Commission v Excite Mobile Pty Ltd [2013] FCA 350 the Federal Court decided that Excite Mobile Pty Ltd engaged in false and misleading and unconscionable conduct in its provision of mobile phone services to customers across Australia. The Court also found Excite Mobile acted unconscionably and used undue coercion when attempting to obtain payment for mobile phone services.

A large number of consumers across all parts of Australia were affected by Excite Mobile’s conduct, including consumers living in indigenous communities on the Cape York Peninsula, remote areas in Queensland and Western Australia, and throughout the Northern Territory.

Excite Mobile promoted its services through telephone marketing (telemarketing) calls by representatives of Lime India and other call centres in India, Pakistan and the Philippines. Lime India also attended to the customer service issues of Excite Mobile’s customers, attempted to collect unpaid accounts purportedly owed to Excite Mobile by customers, and entered information in relation to dealings with Excite Mobile’s customers into an electronic database, for and on behalf of Excite Mobile.

Excite Mobile provided Lime India with the scripts to be used in the telemarketing calls and directed the telemarketers to follow the scripts.

Potential customers were contacted by telemarketers who offered the customer an enticement to contract, namely the “gift” of a phone and holiday vouchers. The contracts offered were on a 24 month plan. The plans consisted of a minimum monthly fee, for which customers would receive a set daily allowance for calls and text messages, depending upon the size of their contract. The most commonly selected contract was the $33 per month plan, for which customers received a daily allowance for calls and text messages capped at $2.20. Any costs incurred outside of the cap would be added to the monthly bill.

The scripted explanation of the cap set out above was not included in any of the 10 recorded examples heard by the court. Instead the telemarketers simply said words to the effect of “[f]or only $33 you get $66 worth of calls.”

The terms that Justice Mansfield found to be unconscionable, in addition to the “day cap” clause included a $75 cool off fee that customers were required to pay, as well as a $195 charge imposed for returning a damaged phone, even if it was only the box that was damaged. (more...)

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Posted 26th April 2013 by David Jacobson in Consumer Law, Marketing, Trade Practices

April 22, 2013

Do Not Call registration period extended

The Do Not Call Register (Duration of Registration) Amendment Specification 2013 (No. 1) extends the period for domestic phone numbers registered on the Do Not Call Register to eight years.

All numbers currently registered will automatically be extended from the existing six years to eight years.

The register is maintained by ACMA

Background

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Posted 22nd April 2013 by David Jacobson in Do Not Call Register, Marketing

January 31, 2013

Developing a social media policy for your business

While social media (any form of interactive online communication) is a relatively new marketing channel for you to generate new business and interact with customers, the laws that apply to other means of communication apply equally to social media.

The risks include potential consumer protection law breaches and other legal, reputation, and operational risks.

Increased risk can arise from poor oversight or control.

The ACCC has published an Information Sheet setting out its view that businesses using social media channels like Facebook, Twitter and YouTube have a responsibility to ensure content on their pages is accurate, irrespective of who put it there.

A business that has chosen not to use social media should still be prepared to address the potential for liability for defamation or negative comments or complaints that may arise in social media.

Activities that result in dissatisfied consumers and/or negative publicity could harm your reputation even if you have not breached any law.

Employees’ communications via social media, even through employees’ own personal social media accounts, may be viewed by the public as reflecting their employer’s official policies or may otherwise reflect poorly on the employer. Therefore, you should establish appropriate policies to address employee participation in social media that implicates your business.

If you haven't reviewed your policy recently (or don't have one) here are some issues to consider:

Have you planned for compliance with laws relating to data security, privacy, debt collection, misleading or deceptive marketing, the Spam Act, workplace issues, consumer protection, fraud, consumer complaints, payment system issues and AML/CTF ?
Do you intend to limit comment to authorised employees or allow all staff to make comments about your business whether or not they are at work?
If you allow your employees to use social media on behalf of the company, can they take their social media account with them when they leave?
Do you require all employees using social media to talk about the business to disclose their association with the business?
Do you prohibit the disclosure of confidential business information?
Do you prohibit the disclosure of customer information?
Do you require staff to inform you about negative comments about your business they become aware of?
Do you prohibit unlawful or offensive comments?
Will a breach of your policies result in dismissal?
What arrangements do you have for keeping a record of your social media activity?

What do you need to do?
1. Develop policies and procedures (either stand-alone or incorporated into other policies and procedures) regarding the use and monitoring of social media and compliance with all applicable laws. The policies and procedures should address risks from online postings, edits, replies, and retention.

2. Implement an employee training program that incorporates your policies and procedures for official, work-related use of social media.

3. Monitor information posted to social media sites administered by you.

Background

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Posted 31st January 2013 by David Jacobson in Compliance, Marketing, Privacy, Web/Tech, Workplace

January 18, 2013

Privacy Act amendments: the effect on current exemptions

The Privacy Act amendments will take effect on 12 March 2014.

How will current exemptions be affected?

Small business exemption
Currently small businesses (with a turnover of $3 million or less) are exempt unless they are:

a health service provider
a trader in personal information
related to a larger business
a contractor with Commonwealth
a reporting entity under the AML/CTF Act
an operator of a residential tenancy database.

A small business can opt in.

The only change to that exemption is that small businesses will be bound by the CR (credit reporting) Code if they elect to participate in the credit reporting system.

Credit providers and credit reporting agencies that are small businesses will be required to comply with the Privacy Act.

Private Sector Employee records
Employee records directly related to a current or former employment relationship will continue to be exempt. But employment agencies and information about prospective employees will continue to be covered by the Privacy Act.

Spam Act and Do Not Call Register Act

APP 7.8 (direct marketing) provides that APP 7 will not apply if the Spam Act or the Do Not Call Register Act apply. These Acts contain specific provisions regarding a particular type of direct marketing or direct marketing by a particular technology.

But if these Acts do not apply then APP 7 will apply to organisations involved in direct marketing relating to electronic messages and other acts and practices not covered by these Acts.

The Spam Act generally applies to any unsolicited commercial electronic message (“spam”) with an Australian link.

The Privacy Act will apply to emails and other non-commercial electronic messages not covered by the Spam Act when it involves the use of “personal information‟.

The amendments could also therefore apply to non-message based online marketing including Twitter and pop up ads.

We will be discussing the effect of the amendments on financial service providers at our February seminars.

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Posted 18th January 2013 by David Jacobson in Do Not Call Register, Marketing, Privacy

December 12, 2012

Advertising by superannuation funds

ASIC has written to superannuation trustees reminding them about disclosure requirements associated with advertising and promotional material (including direct mailouts to members) for superannuation products.

ASIC's Regulatory Guide 234 Advertising financial products and advice services (including credit): Good practice guidance (RG 234) also applies to superannuation.

ASIC's concerns about advertising that may lead to misleading or deceptive concerns include:

the statements do not give a balanced message about the returns, benefits and risks associated with an interest in the fund
the warnings, disclaimers and qualifications in relation to the fund are not disclosed in a balanced manner and are not given sufficient prominence
the document does not give a realistic impression of the overall level of fees and costs that a consumer is likely to pay.

ASIC says it is also aware of superannuation trustees offering cash incentives to encourage members to consolidate their super money, or for new members to acquire an interest in the fund: trustees need to ensure that their messages about their products and services remain balanced and that members are not distracted from making an informed financial decision.

ASIC has also referred to APRA's letter to RSE licensees cautioning them against being influenced by fund promoters.

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Posted 12th December 2012 by David Jacobson in Corporations Act, Financial Services, Marketing, Superannuation

December 4, 2012

CPD Financial Services Law Seminars February 2013: registrations open

Langes+ invites you to this CPD seminar for financial services providers.

In response to feedback we have added a breakfast session for Responsible Managers and a session dealing with Privacy (including the new Australian Privacy Principles and credit reporting) which will be relevant to both marketers and collections staff.

The seminar will cover all the ‘must-know’ rules and traps for each topic. Topics are selected for their relevance and contain practical case studies and examples with time allowed for discussion.

We look forward to seeing you.

PROGRAM

Session 1 (bookable separately)
8am to 9.45 am Introduction to Responsible Managers’ duties (including light breakfast from 7.30am)

Session 2
10 am to 11am Marketing issues:
advertising credit and financial services, dealing with referrers and linked credit

Session 3
11.15 am to 1pm Privacy Act changes (including changes affecting marketing and credit reporting)

Light lunch

Session 4 Collections issues
1.45 pm to 3pm Credit enforcement update: hardship, mortgagee sales and resolving EDR Complaints

When and where
Brisbane 19 February 2013
Sydney 20 February 2013
Melbourne 26 February 2013
Adelaide 27 February 2013

Fees
Whole Program: $550.00 (incl GST)
$495 if you pay by 31 January 2013
$467.50 per person if 3 or more attend from same organisation
OR
All sessions bookable separately
Session 1 $200 (incl GST) ($180 if paid by 31 January 2013)
Sessions 2, 3 and 4 $165 each (incl GST) ($148.50 each if paid by 31 January 2013)

Register now
Brisbane
Sydney
Melbourne
Adelaide

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Posted 4th December 2012 by David Jacobson in Compliance, Corporations Act, Financial Services, Marketing, National Credit Code, Privacy

November 29, 2012

Privacy Amendment Bill passed

The Senate amendments to the Privacy Amendment (Enhancing Privacy Protection) Bill 2012 were agreed to by the House of Representatives on 29 November and the Bill is awaiting Royal Assent. (Background).

Although the reforms will likely commence in March 2014, on a date 15 months after Royal Assent, once the credit reporting provisions commence credit providers will be able to use credit information collected from the date of Royal Assent.

Civil penalties of up to 2,000 penalty units (equivalent to $340,000) are imposed for breaches of the credit reporting provisions in the Act.

If the offending entity is a body corporate the maximum penalty is 5 times the amount of the pecuniary penalty specified for the civil penalty provision (ie a maximum of $1.7million.)

You can see the Privacy Commissioner's response here

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Posted 29th November 2012 by David Jacobson in Financial Services, Marketing, National Credit Code, Privacy

November 28, 2012

ACCC: consumer protection laws apply to social media

This follows recent court and tribunal decisions (see here).

UPDATE 29 November: The Australian Association of National Advertisers (AANA) has published its best practice guideline "Responsible Marketing Communications in the digital space".

The ACCC says "You must ensure any claims you make as part of your marketing and promotional activities are not false, misleading or deceptive. This includes advertisements or statements using any media, including print, radio, television, websites and social media channels like Facebook and Twitter...

You can also be held responsible for posts or public comments made by others on your social media pages which are false or likely to mislead or deceive consumers. ..
Don’t make statements on your Facebook or other social media pages that you wouldn’t make in any other type of advertising. If you’re unsure about what you can or can’t say, seek legal advice.

Monitor your social media pages and remove any posts that may be false, misleading or deceptive as soon as you become aware of them. This is what the ACCC would expect you to do with any other type of advertisement.

Establish clear ‘house rules’ that apply to the actions of your fans, friends and followers when using your social media pages. These rules should be featured prominently on your social media pages. You should then block users who breach these rules."

The Information Sheet contains helpful examples.

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Posted 28th November 2012 by David Jacobson in Consumer Law, Marketing

September 5, 2012

Risk assessment revisited: advertising

After a recent Langes seminar which covered advertising compliance, one of my partners suggested that businesses should review their risk assessment for advertising given the recent increase in enforcement action by ACCC and ASIC and the consequences in terms of penalties and reputation.

How can you do a risk assessment review?

When assessing risk you look at the probability of an event occurring and the seriousness of its impact if it does occur.

You also look at what you can do to reduce the probability of the event occurring and to mitigate the losses if it does occur.

For advertising, the likelihood of a problem depends on the volume of advertising you do, the complexity of your products and services, the variety of advertising methods you use, your compliance processes and the resources you have to monitor and check ads.

The recent Optus and Apple decisions show that penalties are now millions of dollars.

Would such a penalty be catastrophic for your business?

Your decision is: if a problem is likely do you live with the risk (if it is small) or try to prevent it?

But judges have emphasised that breach penalties should not be regarded as a cost of doing business.

If the consequences of not preventing a breach are serious what can you do to mitigate them?

If the probability of a breach is high and the seriousness is high, can you avoid the risk or can you increase preventative action?

Do you need new processes or more resources?

Do you monitor risks regularly to see whether they have moved from low risk to high risk?

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Posted 5th September 2012 by David Jacobson in Compliance, Marketing

August 30, 2012

Responsibility for business Facebook pages

If your business has a Facebook page which promotes or publicises your products or services, you are responsible for what your employees, customers and visitors say on it as well as your own content.

Comments on a business's Facebook page are regarded by law as advertisements which are subject to the laws relating to advertising, including the prohibition on misleading or deceptive conduct.

Advertising is now a high risk element of any business: recent penalities for misleading advertising include $3.61M against Optus and $2.25M against Apple.

The Macquarie Dictionary defines advertisement as "any device or public announcement designed to attract public attention, bring in custom". The medium does not change an advertisement's purpose. You cannot distinguish social media on the basis of being a communications network rather than a traditional ad.

Recent Advertising Standards Board decisions
The Advertising Standards Board deals with complaints about advertising.

Complaints were made against the VB beer and Smirnoff Vodka Facebook pages regarding comments and material posted by Facebook users.

As a preliminary issue in both cases the Board determined that a Facebook page was an ad.

"The Board considered that the Facebook site of an advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control and that the site could be considered to draw the attention of a segment of the public to a product in a manner calculated to promote or oppose directly or indirectly that product. The Board determined that the provisions of the Code apply to an advertiser's Facebook page. As a Facebook page can be used to engage with customers, the Board further considered that the Code applies to the content generated by the page creator as well as material or comments posted by users or friends. The Board noted that on this Facebook page, the user comments identified in the complaint were posted in reply to questions posed by the advertiser.

The Board also noted the advertiser response identifying the tone of the page, the demographic principally targeted by the VB brand and advertisers view of the comments posted by users. The Board further noted that the age access restrictions within Facebook itself, is designed to limit access by children to pages promoting alcohol products and other adult material."

VB Facebook page
The Board determination in respect of VB's Facebook page dealt with a complaint that material openly available on the Facebook pages of VB features:
- Sexism racism and other forms of discrimination or vilification
- Irresponsible drinking and excessive consumption
- Obscene language depiction of under-25 year olds consuming alcohol
- Material that connects alcohol consumption with sexual or social prowess

The Board determined that certain comments were in breach of the Advertiser Code of Ethics:

"The Board noted that social media is an advertising platform that requires monitoring to ensure that offensive material is removed within a reasonable timeframe and that content within a Facebook page should, like all other advertisement and marketing communication, be assessed with the Code in mind. ... The Board recognized the challenges in effectively monitoring social media to ensure that offensive material removed within a reasonable time.

The Board noted the advertiser's response which indicated that the material identified by the complainant had been removed from the Facebook page and the advertiser had implemented a more rigorous monitoring arrangement for its social media presence."

Smirnoff Vodka Facebook page
On the other hand the Board determination in respect of Smirnoff Vodka 's Facebook page considered that, whilst the Facebook page was advertising, the advertisement did not contain material that was contrary to prevailing community standards on health and safety and was not in breach of the Code.

ACCC v Allergy Pathway

In Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74 Justice Finkelstein of the Federal Court fined Allergy Pathway Pty Ltd (formerly known as Advanced Allergy Elimination) and its director, Mr Paul Keir, $7,500 each for contempt of undertakings made to the court following a successful 2009 Australian Competition and Consumer Commission action for false, misleading and deceptive conduct.

Justice Finkelstein decided that Allergy Pathway and Mr Keir made prohibited representations about Allergy Pathway’s purported allergy treatment on its website and on Twitter, Facebook and YouTube in breach of those undertakings.

The representations included testimonials written and posted by clients on Allergy Pathway’s Facebook “wall” and testimonials written by clients and posted by Allergy Pathway on its website and Facebook and Twitter pages.

In his judgment Justice Finkelstein said: “while it cannot be said that Allergy Pathway was responsible for the initial publication of testimonials (the original publisher was the third party who posted the testimonials on Allergy Pathway’s Twitter and Facebook pages) it is appropriate to conclude that Allergy Pathway accepted responsibility for the publications when it knew of them and decided not to remove them. Hence it became the publisher of the testimonials.”

What you need to do
If you have a business Facebook page you need to monitor comments left on your Facebook page, remove offensive material and correct incorrect or misleading comments.

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Posted 30th August 2012 by David Jacobson in Marketing, Web/Tech