There are 3 golden rules for sending marketing messages by email and SMS:

  1. Have the consent of the recipients
  2. Identify the sender
  3. Have an unsubscribe function.

If the rules are not followed, the email and SMS may be spam – unsolicited commercial electronic messages – and the sender prosecuted under the Spam Act 2003.

Telco First is the latest business to be penalized for breaching the Spam Act by ACMA (the Australian Telecommunications and Marketing Authority). Refer ACMA Media Release 10 March 2021.

In this article we examine how Telco First breached the Spam Act, and the three golden rules to avoid sending marketing messages. A marketing commentary prepared by Michael Field follows.

What did Telco First do?

Telco First conducts direct marketing by means of Telemarketing Calls and CEMs (Commercial Electronic Messages).

Telco First sent more than 65,000 illegal spam text messages through another business that used artificial intelligence so that SMS text messages were sent to more than 40,000 phone numbers between March and August 2019.

Telco First is a repeat offender. In September 2018 when trading as Lead My Way, it paid a $285,600 infringement notice issued by ACMA for making telemarketing calls to numbers on the Do Not Call Register without consent.

This time Telco First has paid a $79,800 infringement notice issued by ACMA for illegal spam -text messages. In addition, it has given a court-enforceable undertaking to ACMA to appoint a consultant to review its spam compliance measures before conducting further e-marketing.

How did Telco First break the three golden rules / breach the Spam Act?

Telco first broke all three of the golden rules: by sending messages without the consent of the recipients, by not identifying the sender and without an unsubscribe function.

The three golden rules are found in subsections 16(1), 17(1) and 18(1) of the Spam Act 2003. This is a summary.

1. No consent from the recipients (subsection 16(1) Spam Act):

Unsolicited commercial electronic messages must not be sent … if the relevant electronic account‑holder has not consented to the sending of the message.

2. The message must identify the sender (subsection 17(1) Spam Act):

Commercial electronic messages must include accurate sender information about the individual or organisation who authorised the sending of the message … which clearly and accurately identifies the individual or organisation; and includes accurate information about how the recipient can readily contact that individual or organisation.

3.The message did not have an unsubscribe function (subsection 18(1) Spam Act):

Commercial electronic messages must contain a functional unsubscribe facility … which includes a statement to the effect that the recipient may use an electronic address set out in the message to send an unsubscribe message to the individual or organisation who authorised the sending of the first‑mentioned message presented in a clear and conspicuous manner.

The penalties were calculated as follows:

Subsection 16(1) – 7 contraventions – penalty $29,400

Subsection 17(1) – 12 contraventions – penalty $25,200

Subsection 18(1) – 12 contraventions – penalty $25,200

Note: a subsection 16(1) contravention attracts twice the size of a subsection 17(1) or 18(1) contravention.

The three golden rules to avoid sending spam

These are the three golden rules - the advice ACMA gives to Avoid sending Spam (which is its interpretation of subsections 16(1), 17(1) and 18(1) of the Spam Act).

Rule 1 - Get Permission – there are two types of permission:

  1. Express permission which can be given by filling in a form; by ticking a box on a website; over the phone; or face to face. Sending an electronic message to ask for permission is not permitted because that is a marketing message. Keep a record when a person gives permission.
  2. Inferred permission which can be given be given if the recipient has knowingly and directly given their address and it is reasonable to believe they would expect to receive marketing from the business. For example, if someone has subscribed to a service, has an account or is a member, then marketing is relevant to the relationship. It must be an ongoing relationship, not someone who has just bought something from the business.

Take care with marketing lists. Whether using or buying another’s list, the business is responsible for making sure it has permission for addresses used.

Rule 2 - Identify yourself as the sender

In your message you must:

  • Accurately identify your name or business name
  • Include correct contact details for you or your business

If someone else sends messages on your behalf, the message must still identify you as the business that authorised the message. Use the correct legal name of your business, or your name and the Australian Business Number (ABN).

The information must remain correct for at least 30 days after you send the message.

Rule 3 - Make it easy to unsubscribe

Under the Spam Act, every commercial message (phone, text, SMS) must contain an ‘unsubscribe’ option that:

  • Presents unsubscribe instructions clearly;
  • Honours a request to unsubscribe, within 5 days
  • Does not require payment of a fee
  • Does not cost more than the usual amount for using the address (such as a standard text charge)
  • Is functional for at least 30 days after you sent the message

Examples of unsubscribe messages:

Email To stop receiving messages from us, simply reply to this email with ‘unsubscribe’ in the subject line. OR If you no longer wish to receive these messages, please click the ‘unsubscribe’ button below.

SMS Reply STOP Unsub (1800-number)

Marketing Commentary by Michael Field from EvettField Partners

ACMA (the Australian Telecommunications and Marketing Authority) imposed a $79,800 penalty on Telco First for their most recent breaches of the Spam Act. As this is not their first offence and considering the immense cost burden imposed on businesses by spam, the penalty appears inadequate to act as a meaningful deterrent. According to a recent study by Nucleus Research, spam is estimated to cost Australian businesses an average of $900 per employee per year in lost productivity, or approximately $8 billion per year across the Australian economy.

Telco First sent 65,000 illegal spam text messages to 40,000 phone numbers and received a penalty of $79,800 or $1.22 per message. As a marketer, campaign costs are calculated on a cost-per-reach or cost-per-acquisition basis. Depending on the quality of the list, the ‘open rates’, enquiries and conversions, the campaign may have still been effective and profitable even after paying the penalty.

The regulators need to ensure the penalties are high enough to act as a reasonable deterrent and are not so low that they can be factored in as a ‘marketing cost’ or ‘cost of doing business’ to unscrupulous businesses.

Business owners and managers must pay attention and ensure the marketing messages they are sending by email and SMS comply with the Spam Laws:

  1. Have the consent of the recipients
  2. Identify the sender
  3. Have an unsubscribe function.