Kogan falls foul of regulators again, copping $310,000 fine for spam

The corporate behaviour of online retailer Kogan Australia Pty Ltd has caught the attention of regulators once more, with the company fined $310,800, this time for breaches of Australian spam laws.

An Australian Communications and Media Authority (ACMA) investigation found Kogan (ASX: KGN) sent more than 42 million marketing emails to consumers that made it difficult for recipients to unsubscribe.

The Spam Act requires commercial electronic messages to have a functional unsubscribe facility, but Kogan’s email required people to take additional steps involving setting a password and logging into a Kogan account.

The ACMA received multiple complaints from people frustrated by the Kogan process, Chair Nerida O’Loughlin said.

“Kogan’s breaches have affected millions of consumers,” she said

“Businesses must comply with the unsubscribe requirements in the spam rules. This investigation makes clear that businesses can’t force customers to set a password and login to unsubscribe from receiving commercial messages.

O’Loughlin said the ACMA sent Kogan multiple compliance alerts, before the regulator began its investigation, to make them aware of potential non-compliance with the Spam Act.

“We acknowledge that Kogan fully cooperated with the ACMA in our investigation and took actions to update their unsubscribe facilities prior to its completion,” she said.

The ACMA has accepted a three-year court-enforceable undertaking from Kogan, requiring it to appoint an independent consultant to review its systems, processes and procedures, and to implement any recommendations from the review. The undertaking covers Kogan Australia Pty Ltd and all of the company’s trading names, including the Dick Smith brands.

The undertaking also requires Kogan to train staff responsible for sending marketing messages and to regularly report to the ACMA on consumer complaints.

The ACMA infringement follows on from an ACCC investigation into the company’s marketing and legal action that saw the Federal Court find that a 2018 “tax time savings” marketing campaign conveyed false or misleading representations, because the company increased prices by at least 10%, just before it offered a 10% discount in the sale marketing.

The infringement cost the online retailer $350,000 as well as legal costs.