Kogan Australia Pty Ltd 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. Instead, Kogan required consumers to take additional steps setting a password and logging into a Kogan account.
The 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.
“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.
“The ACMA sent Kogan multiple compliance alerts before commencing this investigation. These notifications 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. That said, we acknowledge that Kogan fully cooperated with the ACMA in our investigation and took actions to update their unsubscribe facilities prior to its completion,” Ms O’Loughlin said.
The ACMA has accepted a three-year court-enforceable undertaking from Kogan, requiring it to 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 of 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 the 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,” Ms O’Loughlin said.
Over the past 18 months, businesses have paid over $2,100,000 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.
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.