The Federal Court has declared the Star Promotions Club Pty Ltd scratch card promotion misleading and deceptive following legal action taken by the Australian Competition and Consumer Commission.
At various times between September 2008 and August 2009, Star had distributed promotional scratch cards for its mobile premium service as inserts in popular magazines and newspapers across Australia, as well as letterbox drops.
"Anyone scratching the cards found that they were a lucky winner, that is, until they sent in their text message to check what prize they had won," ACCC chairman Graeme Samuel said today. "Most consumers found that they were simply signed up to a mobile premium subscription service costing $6.60 per week, rather than the winner of a car or a substantial cash prize.
"Advertising that is used to lure consumers into costly services is unacceptable. Service providers need to make sure that all important terms and conditions are up front and easily understood."
The court has made orders, by consent, that require Star Promotions Club to send the following text message to current subscribers within three months:
FreeMsg Star Promotions Club scratch card promotion found misleading
Court action taken by ACCC
Complaints? Call 1300xxxxxx or your telco provider
The appropriate contact number will be included in the finalised message.
The court has also made orders that require Star Promotions Club to:
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stop future conduct; and
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publish correctives by way of advertisements to be placed in the publications into which the scratch cards were originally inserted.
The corrective advertisements will not only draw the consumer's attention to the conduct but also to the option of barring mobile premium services from their mobile telephone service. It is anticipated that by July this year mobile phone carriers will be offering this option to their customers.
"Call barring should provide extra insurance from unwanted costly services, especially for parents whose children regularly use a mobile phone," he added.
The mobile premium services industry has been the subject of numerous complaints to the ACCC resulting in successful actions taken against a number of providers. The action against Star follows on from a positive court outcome in December 2009 against another trader using scratch cards as a promotional tool for mobile premium services, Clarion Marketing Australia Pty Ltd.
The mobile premium services industry now has a code of conduct that aims to address issues that consumers may encounter with such services. More information about the code and dealing with problems that may arise using premium rate services can be found in the publication Mobile premium services—information for consumers available at the Publications link on the ACCC website.