Melon Corporate Blog
Optus Cops $110 000 Fine for SPAM
In January 2009 Optus - one of Australia’s largest telecommunication companies - was fined $110,000 for sending 20,000 electronic messages to its customers in contravention of the Spam Act 2003. This fine is the second biggest penalty imposed for a single breach of Australia’s anti-spam laws.
OptusZoo Entertainment Services sent SMS messages to its customer’s mobile phones and used the sender identification “966”. Optus assumed recipients would make the connection between “966” on a mobile phone keypad, and the word "ZOO" which can also be spelt out using the three numbers. However the Australian Communications and Media Authority disagreed and the fine was imposed.
Marketing is obviously a key factor to creating a brand and increasing customer awareness of a business or product. However it is important that business don’t break any laws when using the details of their customers or potential customers to market their business or product. Customer details such as name, address and contact details should be handled carefully to avoid prosecution under the Spam Act 2003.
What is the Spam Act 2003
See more information about the Act in the document a practical guide for business about the Spam Act 2003 Act here (PDF).
The Spam Act 2003 prohibits 'unsolicited commercial electronic messages' originating in Australia and sent to any destination, and originating overseas that are sent to an address accessed in Australia. Electronic messages include emails, instant messaging, SMS and other mobile phone messaging. Businesses must ensure that they do not use customer details to send electronic messages without:
1. consent of the customer,
2. which clearly identifies the sender of the message
3. and which includes an 'unsubscribe' facility.
Failure to comply with the Spam Act 2003 can result in a penalty of up to $220,000 for a single day's contravention and a penalty of up to $1.1 million if there is a repeat contravention.
Previous Fines
In October 2006 The Federal Court in Perth awarded a pecuniary penalty of $4.5 million against Clarity1 Pty Ltd and $1 million against its managing director Wayne Mansfield for contravention of the Spam Act 2003 – Wayne Mansfield can be followed on twitter here (if you care to follow the thoughts of a convicted Australian spammer!).
Optus’s recent $110,000 fine is a fresh reminder to Businesses that the Australian Communications and Media Authority consider the Spam Act 2003 to be an important piece of legislation and it is not to be ignored.
Businesses should ensure they have consent of the customer when engaging in direct marketing to a customer such as email and SMS advertising.
Importantly the legislation does say that consent can be express or implied. Therefore it means that you can imply that the person has consented to receive your email in certain situations, for example, if you already have a business relationship with the receiver, or that they have already subscribed to your email newsletter.
Clearly identifying the sender of the message
Business should make sure that accurate and clear information about who the sender is sent along with the message, as well as how they can be contacted.
If a Business uses a third party to send commercial electronic messages on their behalf, then this third party must include accurate information about the Business. Information about the third party is not required.
Include an 'unsubscribe' facility. All messages must contain a functional unsubscribe facility, allowing people to opt-out from receiving future messages. Such a request must be honored.
Address Harvesting
Lastly the legislation bans the use of address-harvesting software and harvested-address lists, for the purpose of sending spam.
Businesses should ensure that the use of such software and lists are for purposes other than for sending unsolicited commercial electronic messages.
However lists generated manually (for example by reviewing websites) are not prohibited. Note that Businesses may use a purchased or rented list of contacts, but they need to be careful to ensure that the requirements of the Spam Act 2003 have been met (i.e. consent has been obtained). This is risky and therefore best to avoid altogether.
Questions?
The Australian Communications and Media Authority is the Government authority responsible for SPAM and related issues in Australia.
They have a dedicated hotline for SPAM related questions: Enquiries: 1300 855 180
Email: .(JavaScript must be enabled to view this email address)
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Thanks for clarifying all those issues. This always feels like such a grey area to me, so it’s nice to have a good explanation. I’ll be bookmarking this post as soon as I’ve submitted this comment! Cheers, Glenn. (@divinewrite on twitter)
By Glenn Murray on 05 02 2009
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