The ACCC has instituted proceedings in the Federal Court against JustAnswer LLC for allegedly misleading consumers as to its affiliation with Australian Ombudsman or Government agencies and the cost of its online question and answer service, in breach of consumer laws.
It is alleged that from about 1 November 2022, JustAnswer made false or misleading representations via a chat widget on its website that consumers could use the online question and answer service for just AUD$2. However, in addition to paying the $2 joining fee, consumers were signed up to an ongoing subscription costing between around $50 and $90 per month.
The ACCC alleges that consumers were not adequately informed of the ongoing subscription fee and suffered financial harm as a result.
"Had consumers been aware that the total price of the JustAnswer online service cost at least 25 times more per month than the promoted joining fee, they may have chosen not to use it," ACCC Deputy Chair Catriona Lowe said.
"Through its chat widget, JustAnswer offered to connect consumers to 'experts' in particular subject areas for a one-off fee of $2. The chat widget didn't disclose any other charges, and the substantially higher ongoing monthly fee was not mentioned until consumers were directed to a payment screen."
"The monthly subscription fee was shown in a way that we believe many consumers would not have seen," Ms Lowe said.
"Manipulative online design practices which guide consumers to sign up for subscriptions they do not want or did not intend to buy can cause distress and financial loss."
In addition to the alleged price misrepresentations, the ACCC alleges JustAnswer misled consumers by purporting that it or its services were sponsored or approved by, or otherwise affiliated with, the Fair Work Ombudsman, an Australian Ombudsman, or an Australian Government department.
"We consider some consumers may have engaged with JustAnswer on the mistaken belief that their questions would be answered by an independent ombudsman, such as the Fair Work Ombudsman," Ms Lowe said.
"The ACCC commenced this investigation after receiving large numbers of complaints from consumers who claimed they were not aware of the ongoing subscription charges or who thought they were dealing with an Australian government body."
The ACCC is seeking compensation orders for affected consumers, injunctions, civil pecuniary penalties, publication orders, and costs, as well as declarations that JustAnswer contravened consumer laws and the implementation of a compliance program.
Background
JustAnswer is registered and based in the United States and operates its business in 196 countries, with more than 700 employees.
It provides a service connecting consumers to subject matter 'experts' in areas such as medicine, law, accounting and technology, who are available to answer consumers' questions. This service can be accessed via JustAnswer's website or its Android/iOS app, the latter of which is not subject to allegations in this proceeding.
Consumers who use a search engine to find information on a particular topic may come across search results with links to JustAnswer's website. This included search ads sponsored by JustAnswer.
In June, the ACCC published the tenth and final report of its Digital Platform Services Inquiry, which found consumers continue to face harms from unfair trading practices including manipulative design operations, such as using interfaces that direct consumers to more expensive subscriptions or purchase options, as well as undisclosed sponsorships and subscription traps. A subscription trap is when a business misleads a consumer into signing up for a subscription by representing that they are making a one-off purchase, or by making cancellation of a subscription difficult.
Consumer issues in the digital economy are one of the ACCC's current enforcement priorities. This includes work in addressing unfair subscription-related practices, including subscription traps.
Concise Statement
This document contains the ACCC's initiating court document in relation to this matter. We will not be uploading further documents in the event these initial documents are subsequently amended.
ACCC v JustAnswer LLC - Concise Statement ( PDF 626.58 KB )
