Fintech firm Kogan breached the Australian Spam Act, says ACMA
After careful investigation, the Australian Communications and Media Authority (ACMA) has found Australian e-tailer Kogan breaching the Spam Act. ACMA says the company sent over 42 million email marketing newsletters without an easy way to opt out or unsubscribe. Kogan Australia has agreed to a court-enforceable undertaking. The company also paid a $310,800 infringement notice for Australian Spam law breaches.
ACMA on Kogan breaching Spam Act
The ACMA said that e-tailer Kogan sent out 42 million mails to its customer base without an easy way to subscribe. Moreover, Kogan also required its customers to take additional steps like setting a password and logging into an account on its website.
The regulatory found Kogan’s conduct breaching the Span Act which requires commercial emails and electronic messages to include an easy and functional unsubscribing feature. Nerida O’Loughlin, ACMA Chair said the breaches of Kogan have affected millions of Australian consumers. O’Loughlin added that the ACMA has received various complaints from several recipients of Kogan’s emails conveying their concern and frustration with the practices of Kogan.
The ACMA had sent Kogan multiple compliance alerts before starting its investigation.
These alerts are designed to alert the business of potential non-compliance with the Spam Act.
ACMA notifies businesses on notice, addresses the concerns of consumers and informs that ACMA will investigate you under the law, as it has done here. That being said, ACMA acknowledged that the etailer Kogan fully cooperated with the regulatory in its investigation and took the required actions to update their unsubscribe facilities before its completion.
More on the email marketing breach
Businesses have to comply with the unsubscription requirements in the Spam Act. Investigation of Kogan makes it clear that businesses can not force their customers to set a password & login to unsubscribe from receiving commercial email and messages.
The ACMA says that it has accepted a 3-year court-enforceable undertaking from the etailer fintech Kogan, needing it to appoint an independent consultant to analyze and review its processes, systems and procedures as well as to implement any recommendations from the review.
The undertaking to the ACMA covers Kogan Australia Pty Ltd and applies to all of the trading names including all the Dick Smith and Kogan brands. The undertaking will also require Kogan to train its staff responsible for sending out the marketing mails, messages and material and to regularly report it back to the ACMA on actions taken with regards to consumer complaints.
O’Loughlin added that this comprehensive 3-year court-enforceable undertaking and infringement notice sends a strong message to Kogan and other businesses that the ACMA will not hesitate in taking action for breaches of the spam rules.
In the last 18 months, the ACMA reported that businesses have paid more than $2,100,000 for ACMA-issued infringement notices for breaching spam as well as telemarketing laws. ACMA has also accepted 9 court-enforceable undertakings & issued 10 formal warnings to organizations.