Australia's Competition and Consumer Commission (ACCC) has warned that consumers should be wary before signing up to mobile premium phone services.
"These mobile services include extras such as ring-tones, wallpapers and information services," ACCC Chairman, Mr Graeme Samuel, said. "They are featured in many advertisements in magazines, on television and on the internet.
"While these extras may offer variety and entertainment for some consumers, they are also the subject of ongoing complaints. This has led the ACCC to turn its attention to the advertising practices in the industry."
The ACCC has instituted legal proceedings against one company, TMG Asia Pacific already and continues to investigate others with possible future enforcement action to follow.
The ACCC alleges that in three of its television advertisements for its 'Text and Win' mobile premium services*, TMG failed to adequately disclose the costs and terms associated with the services and that this was likely to mislead consumers.
"As many of these services are directed at the younger, less experienced consumer, the ACCC is particularly concerned over what it considers is the failure of certain advertisements to adequately disclose the costs and ongoing nature of the services offered," Mr Samuel said.
"Television advertisements with small print disclosure and busy or distracting images and magazine advertisements featuring tiny print and confusing clutter mean that many consumers would not appreciate the significant ongoing costs they could incur by simply texting in to the number on the screen or in print.
"Many consumers have reported to the ACCC that they were not fully aware of the costs of the services until they received their first bill or found that they had used up all their pre-paid credit.
"The ACCC has updated its website information for consumers on mobile premium services and recommends that anyone wanting to buy a mobile premium service should take note of all the terms and conditions to avoid an unexpectedly high phone bill or rapidly vanishing phone credit.
"Advertisers of these services should also take the opportunity to review their advertising practices. Attempts to distract and confuse so that consumers cannot make informed choices are not acceptable. Such advertising practices may also potentially be in breach of the Trade Practices Act 1974."
The Mobile Premium Services Industry Scheme was put in place in October 2006 to provide guidance in advertising practices and a complaints handling process. The scheme is currently under review and the ACCC is taking part in that review.
Posted to the site on 26th August 2008
Posted to: www.cellular-news.com/story/33260.php