Kogan Pays $310K For Breaching Spam Laws

Kogan Pays $310K For Breaching Spam Laws
B&T Magazine
Edited by B&T Magazine

Kogan Australia has agreed to a court-enforceable undertaking, and paid a $310,800 infringement notice, for breaches of Australian spam laws.

An Australian Communications and Media Authority (ACMA) investigation found Kogan sent more than 42 million marketing emails to consumers from which they could not easily unsubscribe, the authority said in a press release.

Instead, Kogan required consumers to take additional steps setting a password and logging into a Kogan account. ACMA found Kogan’s conduct breached the Spam Act, which requires commercial electronic messages to contain a functional unsubscribe facility.

“Kogan’s breaches have affected millions of consumers. The ACMA received complaints from a number of recipients of Kogan’s email expressing their frustration and concern with Kogan’s practices,” ACMA Chair Nerida O’Loughlin said in a statement.

“Businesses must comply with the unsubscribe requirements in the spam rules. This investigation makes clear that businesses can’t force customers to set a password and login to unsubscribe from receiving commercial messages.”

O’Loughlin said ACMA had sent Kogan multiple compliance alerts before commencing this investigation.

These notifications, she said, are designed to alert businesses of potential non-compliance with the Spam Act. “ACMA alerts put businesses on notice—address consumer concerns or we will investigate you under the law, as we have done here,” she said.

O’Loughlin acknowledge that Kogan fully cooperated with the ACMA in its investigation and took actions to update their unsubscribe facilities prior to its completion.

ACMA has accepted a three-year court-enforceable undertaking from Kogan, which requires it appoint an independent consultant to review its systems, processes and procedures, and to implement any recommendations from the review.

The undertaking covers Kogan Australia Pty Ltd and is applicable to all the company’s trading names, including the Kogan and Dick Smith brands.

The undertaking also requires Kogan to train staff responsible for sending marketing messages and to regularly report back to ACMA on actions taken in relation to consumer complaints.

“This substantial infringement notice and a comprehensive three-year court-enforceable undertaking sends a message to Kogan and other businesses that the ACMA will take strong action for breaches of the spam rules,” O’Loughlin said.

Over the past 18 months, businesses have paid over $2.1 million for ACMA-issued infringement notices for breaking spam and telemarketing laws. ACMA has also accepted nine court-enforceable undertakings and issued ten formal warnings to businesses.

ACMA said enforcement action for breaches of spam laws can include formal warnings, infringement notices, action in the federal court and accepting court-enforceable undertakings. Repeat corporate offenders can face court-imposed penalties of up to $1.11 million a day.

The news comes after Kogan Australia was ordered to pay a penalty of $350,000 for making false or misleading representations about a tax time sales promotion, in breach of Australian Consumer Law.

It also follows Kogan being urged by concerned Hindus to immediately withdraw all six versions of a beach-towel, sold at its subsidiary Matt Blatt, carrying the image of Hindu deity Lord Ganesh.

The towel was deemed highly inappropriate.

Featured image source: Kogan.com

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