Foxtel Management Pty Ltd has provided the ACCC with a court enforcebale undertaking following allegations that Foxtel breached sections 18, 32(2) and 36(4) of the Australian Consumer Law (ACL) with a free television offer.
During the period 12 February 2012 to 5 April 2012, Foxtel represented through television commercials, its website and direct mail that a free 22 inch television would be given to customers who signed up to a 12 month Foxtel subscription, within ten days of installation. Certain advertising stated that the offer was limited to 1,500 free televisions but 8,400 consumers signed up to the offer. More than half of these consumers received the free television within the stipulated ten day time frame, but a significant number of consumers did not receive the gift within the promised period.
Foxtel has undertaken to give a one month subscription credit to consumers, by 15 July 2013, who:
- signed up to the free television offer during the relevant period;
- did not receive the free television with ten business days of installation; and
- still had a Foxtel subscription as at 1 May 2013.
Additionally, Foxtel has undertaken to:
- report to the ACCC by 15 August 2013, the number of customers eligible for the subscription credit and those who received the subscription credit;
- appoint a qualified compliance professional to identify, assess and provide recommendations relating to possible breaches of the ACL within Foxtel’s business; and
- refrain from engaging in similar conduct in the future.
The maximum penalty for breaches of the relevant ACL provisions is $1.1 million.
ACCC Chairman Rod Sims, said, “it is important for businesses to have a reasonable basis for any promises made to consumers otherwise they risk breaching the Australian Consumer Law.”
This is consistent with the enforcement action taken last year by the ACCC in relation to ‘bait advertising’. As reported in our previous post, Zamel’s jewelers were targeted for representing inaccurate savings claims in their advertising and were ordered to pay a $250,000 pecuniary penalty and to issue corrective advertising. The ACCC has also recently taken action against Pepe’s Ducks, Hooker Meats and Kingisland Meatworks & Cellars in relation to misleading advertising.