Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
The Australian Mobile Telecommunications Association (AMTA) is concerned that advertising could become more confusing if proposed legislation is implemented. Isn’t it nice that AMTA has our welfare at heart? Don't be so sure!
The real agenda here, I suspect, could well be to preserve the ability of mobile industry players that try and get people to commit to costly ongoing subscription services for cellphone ringtones, wallpapers, etc with adverts that are, at best less than upfront.
The ACCC is already going after one company, TMG Asia Pacific which advertised its 'Text and Win' mobile premium services on television earlier this year and has warned that "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."
Earlier this year I higlighted the misleading advertising of one ringtone service and suggested that the industry scheme which is supposed to govern how these services are advertised and delivered was less than adequate. So it's good to see action being taken to legislate against such dubious practices.
The draft Trade Practices Amendments (Component Pricing and Other Measures) Bill 2008 proposes to replace the existing section of 53C (1) of the Trade Practices Act with a new section which will prohibit corporations from using 'component pricing' when making representations to consumers about the price of a good or service unless a single figure, the single price the consumer is required to pay for the good or service is prominently displayed.
Sounds good, eh? AMTA does not think so and has called on the Federal Government to reconsider its proposed legislation claiming it could result in "crowded advertisements could lead to consumer confusion instead of the Government’s stated aim of clear price information for customers."
AMTA CEO Chris Althaus claims that the requirement for clear price information is already enshrined in Federal, State and Territory regulation as well as telecommunications-specific regulation. "The information provided will essentially not change, but the presentation will – leading to crowded and confusing advertisements," Althaus claimed.
He is being disingenuous. It is quite clear that many of the ads for ringtone services are designed to hide the true costs as much as possible without actually breaching the current rules.
Althaus said AMTA believed it was sufficient for the single price to appear in the disclaimers of an advertisement provided there was a clear link between the disclaimer and the relevant part price representation. "This established method of informing consumers of the price provides a practical and efficient way for the relevant information to be conveyed. It is simple and well understood by consumers."
So why do Ringtone services have such a bad name for conning people into costly subscriptions?
David Bass
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