$15 Million Penalty For Spammers

Enough is enough cries the Federal Court as it hands out millions of dollars in fines for SMS spammers

The Federal Court in Brisbane imposed a total of $15.75 million in penalties for contraventions of the Spam Act 2003 (the Spam Act), following the Australian Communications and Media Authority’s first court action taken against unsolicited SMS messages.

‘This is a significant outcome for all mobile phone users,’ said Chris Cheah, Acting Chair of the ACMA. ‘The maximum penalties provided for under the Spam Act are very high. The ACMA considers that the substantial penalties imposed by the court in this case show that spam will not be tolerated in Australia.’

Two companies – Mobilegate Ltd and Winning Bid Pty Ltd – and three individuals – Simon Anthony Owen, Tarek Andreas Salcedo and Glenn Christopher Maughan – were found, by default judgment of the Court, to have contravened the Spam Act and the Trade Practices Act 1974.

‘In the ACMA’s view the conduct of these respondents was particularly malicious and deceitful as it deliberately and systematically preyed upon vulnerable people, offering false hope and expectations,’ Mr Cheah said.

The ACMA instituted proceedings against eight respondents in the Federal Court in December 2008, alleging contraventions of both Acts in relation to premium SMS chat services. The ACMA alleged that the respondents were engaged in a complicated scheme to obtain mobile phone numbers from members of dating websites, using fake member profiles, in order to send commercial electronic messages by SMS.
The ACMA alleged that: 

• after the numbers were obtained, unsolicited messages were sent to the mobile phone numbers offering the opportunity to chat via SMS using services described as the ‘Safe Divert’ or ‘Maybemeet’ services;

• the chat was not offered by genuine members of dating websites but employees of Mobilegate and Winning Bid;

• consumers were charged up to five dollars per message; and

• when users questioned whether the messages were from a real person, they were told that it was a real person who was using the “Safe Divert” service to keep their mobile phone number private.

The ACMA believes the scheme generated more than $2 million in proceeds.
A further hearing is scheduled to commence on 30 November in relation to the allegations as against the remaining three respondents.

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