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Online giant Kogan hit with massive fine for another consumer breach

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Major online retailer Kogan has been handed a massive fine for bombarding customers with spam emails.

The company has agreed to pay $310,800 for sending out more than 42 million unwanted marketing messages.

Kogan made it difficult to unsubscribe from the emails, requiring customers to set up passwords and log into their accounts.

Australia’s communications watchdog found the company breached the Spam Act, which requires electronic marketing material to contain an unsubscribe function.


Nerida O’Loughlin from the Australian Communications and Media Authority, on Wednesday said Kogan’s breaches affected millions of customers and frustrated many people.

She said the company was given multiple warnings about its tactics before the official investigation began.

“Businesses must comply with the unsubscribe requirements in the spam rules,” Ms O’Loughlin said.

“This investigation makes clear that businesses can’t force customers to set a password and login to unsubscribe from receiving commercial messages.”

The company has since updated the unsubscribe settings on marketing emails and accepted a three-year, court-enforceable undertaking which will apply to both its Kogan and Dick Smith brands.

It will be required to appoint an independent consultant to review the company’s systems and procedures, as well as train staff responsible for sending marketing messages.

Kogan will also need to regularly report to the ACMA on its customer complaints.

Ms O’Loughlin said the significant fine and tough terms of the deal should send a clear message to Kogan and other companies about flouting spamming laws.

Businesses have paid more than $2.1 million over the past 18 months for breaching spam and telemarketing rules.

The ACMA has also accepted nine court-enforceable undertakings and issued 10 formal warnings.

The latest ruling comes after Kogan was fined $350,000 last year over a deceptive tax time promotion.

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The retailer was found to have deceived and misled customers in mid-2018 with an end of financial year promotion offering a 10 per cent discount on some products between June 27 and 30 with the code “taxtime” at checkout.

But after an investigation by the consumer watchdog, the Federal Court found Kogan had increased its prices ahead of the promotion and then reduced them again on July 2.

ACCC chairman Rod Sims said at the time that price reductions weren’t genuine savings and many customers who bought one of the 600 or more products actually paid the same or more for their items than they would have immediately before and after the promotion.

Kogan has been one of the major beneficiaries of lockdown, online spending, reporting a net profit of $26.8 million for the year ending August, 2020.


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