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As tens of thousands of single Australians continue to turn to
dating apps to find companionship and love, the price of meeting
someone special keeps getting higher.
And although many people are prepared to pay the hefty prices,
the ACCC is warning consumers to read terms and conditions
carefully before signing up, or face the possibility of being
charged much more than expected.
The Australian Consumer watchdog has launched a case in the
Federal Court against online dating service eHarmony, alleging that
it has misled Australian consumers about cancellation fees, renewal
prices and the duration of memberships.
‘Misleading
representations’
The Australian Competition and Consumer Commission (ACCC) said
it has received hundreds of complaints about eHarmony and the
allegations in its case against the dating service relate to
conduct dating back to at least November 2019, and is ongoing.
The ACCC’s case specifically alleges misleading
representations by eHarmony, including in relation to statements
that it offered ‘free dating’, and yet didn’t actually
show members pictures of potential partners unless they bought more
expensive memberships.
The watchdog also alleges that eHarmony breached Australian
Consumer Law through failing to accurately display pricing and
cancellation options, thereby making it difficult for users to opt
out of automatically renewals.
Automatic
renewal ‘traps’
The ACCC alleges that eHarmony failed to prominently disclose
automatic renewal pricing, which was only displayed in small font
late in the purchase process and within its lengthy terms and
conditions, a document very few people actually read.
ACCC Chair Ms Gina Cass-Gottlieb has said the alleged breaches
are ‘disappointing’, particularly given the ACCC consulted
with eHarmony and other dating sites back in 2016 to develop a set
of best practice guidelines to assist dating sites to ensure they
provided consumers with transparent, clear information.
But the issue of “subscription renewals” is a fairly
widespread problem, not just inherent in dating sites and apps, and
in recent months the ACCC has put all digital platforms on notice
with regard to what it calls “subscription traps” –
warning tech companies that they need to be very clear with
consumers about renewals and cancellation options.
Advertising and
marketing claims
The ACCC has also been scrutinising the digital advertising and
marketing practices of digital companies across a number of
industries.
Since the pandemic, online companies have boomed – they
were a blessing during the lockdowns when we had little choice but
to shop, entertain ourselves, and socialise online, and most are
still thriving.
Romance related
scams
In 2019, the ACCC’s Scamwatch reported that one-fifth of
scams were romance and dating related, and the total financial
losses of about 4,000 scams tallied $28.6 million. Around 37.5 per
cent of reports to Scamwatch resulted in a loss, with an average
loss of more than $19,000.
Then, in 2020, along came the pandemic and
scams of all kinds became much more prevalent, and scammers
found all sorts of crafty new ways to
defraud innocent people. Statistics compiled during lockdowns
showed that cyber crime was increasing across the board.
The advice to those lonely hearts who interact on online dating
sites is typically for everyone to take sensible precautions,
be mindful of the information you share, and stay safe, and
while it’s important to be
wary of the people you might meet, people using online dating
services should also be able to have confidence that the site
they’ve chosen to use is also trustworthy.
As ACCC chair Ms Gina Cass-Gottlieb has noted, “dating apps
provide important services that are used by many Australians to
meet new people and make connections, and they have become an
intrinsic part of many people’s social lives.
These are personal services, and consumers may bring a different
state of mind to these interactions than a commercial one. In
addition, some consumers who use these apps may be more at risk
from misleading or manipulative selling practices than they would
be in other, less personal transactions.”
What is
Australian Consumer Law?
The ACCC is the national administrator of Australia’s
Consumer Law, which is set out in the Competition
and Consumer Act 2010.
The legislation was enacted to protect consumers from unfair
business practices. It applies to Australian businesses as well as
any person or organisation conducting business in Australia –
this includes businesses that are overseas owned, such as eHarmony,
which has its base in the US.
Australian consumer law covers such issues as:
- Fair contract terms law covering standard form consumer and
small business contracts; - Consumer rights when buying goods and services;
- A national product safety law and enforcement system;
- A national law for unsolicited consumer agreements covering
door-to-door sales and telephone sales; - National rules for lay-by agreements; and penalties,
enforcement powers and consumer redress options. - Advertising and promotion
- Anti-competitive business practices
The ACCC has significant resources to educate companies and
encourage compliance with the Competition and Consumer Act 2010 and
the Australian Consumer Law. It also has power to take enforcement
action. Breaches of the law can attract fines and pecuniary
penalties.
In addition to Australian Consumer Law, the Australian
Securities and Investments Commission Act 2001 (ASIC Act),
is enforced by ASIC, so that financial products and services
are treated in the same way. The ASIC
Act also applies to all Australian businesses and overseas
businesses conducting operations in Australia.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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