Woolworths forks out over $1 million for spam law breach - Inside FMCG

Woolworths forks out over $1 million for spam law breach

Retail group Woolworths has paid a hefty million-dollar penalty, handed down by the Australian Communications and Media Authority (ACMA), in response to more than five million breaches of spam law.

The ACMA discovered that Woolworths sent marketing emails to consumers, between October 2018 and July 2019, even though they had previously unsubscribed from these messages.

The infringement notice for $1,003,800 is the largest ever issued by the ACMA.

“The spam rules have been in place for seventeen years and Woolworths is a large and sophisticated organisation. The scale and prolonged nature of the non-compliance is inexcusable,” ACMA chair Nerida O’Loughlin said.

“Woolworths failed to act even after the ACMA had warned it of potential compliance issues after receiving consumer complaints.”

Under the Spam Act 2003, Australians have the right to unsubscribe from marketing emails that they do not want to receive. In this case, Woolworths Rewards members claimed that they had tried to unsubscribe from messaging on multiple occasions but their requests were not actioned.

O’Loughlin said this was because Woolworths’ systems, processes, and practices were inadequate to comply with spam rules, which was echoed by WooliesX managing director, Amanda Bardwell said.

“Many of the breaches were the result of technical and systems issues, which we fixed in 2019,” Bardwell said. “Subsequent breaches occurred because we continued sending communications to email addresses shared by multiple Rewards members, where only one member had made an unsubscribe request.”

When Woolworths Rewards was established in 2009 it allowed new members to sign up with email addresses already on its database. At the time, some households used a shared email address provided by internet service providers. In 2018, Woolworths Rewards stopped allowing new members to sign up with existing email addresses.

“While we were acting on unsubscribe requests from individual Rewards members, we did not assume it meant other members sharing that email address had to be opted-out as well,” Bardwell said.

Woolworths has now unsubscribed all members who share an email address where at least one of the members has unsubscribed, based on ACMA instructions.

The supermarket giant has also agreed to a three-year court-enforceable undertaking in which it has committed to appointing an independent consultant to review Woolworths’ Rewards and BIG W systems and processes.

Woolworths said it will undertake training and report all non-compliance it identifies to the ACMA.

“The ACMA’s actions should serve as a reminder to others not to disregard customers’ wishes when it comes to unsubscribing from marketing material,” O’Loughlin said.

Over the past 12 months, the ACMA has collected over $1,753,500 from businesses for infringement notices for breaking spam and telemarketing laws. The ACMA has also accepted six court-enforceable undertakings and given seven formal warnings to businesses.

The ACMA said repeat corporate offenders may face penalties of up to $2.22 million a day.



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