Tuesday, 03 May 2016 11:00

Digital advertiser cops $230,000 fine for breach of consumer law Featured

Digital advertiser cops $230,000 fine for breach of consumer law Image courtesy of Stuart Miles, freedigitalphotos.net/images

Digital advertising services company, The Community Network, has been fined $230,000 by the Federal Court for breaching Australian Consumer Law (ACL) by engaging in “unconscionable conduct” in its dealings with one small business.

The Community Network sells digital advertising services to small businesses throughout Australia, with the advertising presented on branded LCD screens at various sites such as fitness centres, newsagencies, and shopping centres.

The Australian Competition and Consumer Commission (ACCC) instituted court action last November against Multimedia International Services, trading as The Community Network.

The Federal Court declared that in its dealings with the small business The Community Network had refused to release it from its contract for advertising services when the company was not providing those advertising services - then pursuing the business for non-payment, threatening legal action and engaging debt collectors.

The ACCC has accepted a court enforceable undertaking from The Community Network to resolve the its concerns about the standard form contract used by the company, which included an automatic renewal term.  The ACCC said it was concerned this term had “the potential to be misleading or deceptive to prospective advertisers”.

“The Community Network has undertaken to amend its standard form contract and change certain aspects of its practices to address the ACCC’s concerns. The amendments include a reduction of the notice period required to terminate the contract,” ACCC Deputy Chair Dr Michael Schaper said.

“Unconscionable conduct is a priority area for the ACCC, particularly where it affects small businesses.

“The ACCC brought these proceedings because it had received numerous complaints from small businesses that The Community Network was requiring payments to be continued under its contracts, despite not providing the digital advertising services promised.  Some small businesses had also complained that they were misled by the failure to clearly disclose the effect of an automatic renewal term.”

Dr Schaper said the Community Network case was important “because it makes it clear that businesses like The Community Network must comply with the Australian Consumer Law in their dealings with small businesses.  The ACCC will continue to take appropriate enforcement action to protect small businesses.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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