Australian spammers fined $16m

Australia’s media and communications regulator says hefty fines should serve as a warning to anyone considering mobile phone spamming.Fines totalling almost $16 million were handed down to two companies and three individuals in the Federal Court in Brisbane late yesterday for breaches of the Spam Act.To read this ABC News report in full, see:
www.abc.net.au/news/stories/2009/10/24/2723162.htmAlso see:Text spammers fined $16m
Multi-million-dollar penalties have been dished out in a landmark court case in Brisbane about mobile phone spam.
www.abc.net.au/news/stories/2009/10/23/2722971.htm
$15m fine for SMS scammers
The operators of a mobile phone text scam that preyed on the desperate and dateless were slammed with $15.8 million in fines for breaching anti-spam laws in Queensland’s Federal Court.The fine makes the operators, who posted fake personals profiles on dating web sites to harvest mobile phone numbers and lure men to pay up to $5 per message for SMS sex chat services, the recipients of the largest spam penalty ever handed out in Australia.
www.australianit.news.com.au/story/0,,26250790-15317,00.html
www.theaustralian.news.com.au/story/0,25197,26252641-5013404,00.html Million dollar penalties issued in first SMS spam case [news release]In a landmark decision today, 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.’In August 2009, two companies – Mobilegate Ltd and Winning Bid Pty Ltd – and three individuals – Mr Simon Anthony Owen, Mr Tarek Andreas Salcedo and Mr 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.Australians are encouraged to report spam to the ACMA by visiting the website at www.spam.acma.gov.au or calling 1300 855 180.BackgrounderThe Spam Act 2003 regulates unsolicited commercial electronic messages in Australia. Commercial electronic messages can be emails, SMS messages, MMS messages, instant messaging messages or any other similar messages.The Act sets out that commercial electronic messages must have the following features:

  • Consent – it must be sent with the recipient’s consent. They may give express consent, or consent may be inferred from their conduct and ‘existing business or other relationships’;
  • Identify – it must contain clear and accurate information about the person or organisation that authorised the sending of the message; and
  • Unsubscribe – it must contain a functional ‘unsubscribe’ facility to allow the recipient to opt out from receiving message from that source in the future.

The penalty provisions of the legislation came into force in 2004. At that time Australia was tenth in the ranking of spam-relaying countries for email spam, according to the Sophos list. For the 2008 calendar year, Australia had fallen to 32nd.The Act provides a range of enforcement options and the ACMA determines an appropriate action on a case-by-case basis. Formal warnings are used by the ACMA to indicate concerns about alleged contraventions and allow for the business or individual to take compliance action to prevent any future contraventions.Enforceable undertakings can be offered to the ACMA at any time and provide the opportunity for a business or individual to formalise its commitment to compliance with the Spam Act. The ACMA may also give an infringement notice in relation to particular civil penalty provisions. In addition, the ACMA can lodge proceedings in the Federal Court, including seeking an injunction. The legislation sets out penalties of up to $1.1 million a day for repeat corporate offenders.Today the Court handed down the following penalties in relation to these companies and individuals:
Name and Penalty

  • Mobilegate Ltd $5 million
  • Winning Bid Pty Ltd $3.5 million
  • Mr Simon Anthony Owen $3 million
  • Mr Tarek Andreas Salcedo $3 million
  • Mr Glenn Christopher Maughan $1.25 million

In December 2008, the ACMA commenced proceedings against MobileGate Ltd, Jobspy Pty Ltd, Winning Bid Pty Ltd, Simon Anthony Owen, Tarek Andreas Salcedo, Glenn Christopher Maughan, Scott Mark Moles and Scott Gregory Phillips. This is the first time the ACMA has taken court action against companies sending unsolicited SMS spam.In the only previous proceeding brought by the ACMA under the Spam Act, the Federal Court in 2006 ordered Clarity1 Pty Ltd and Mr Wayne Mansfield to pay $4.5 million and $1 million respectively, for sending unsolicited emails, and for using harvested address lists.In May 2009, the ACMA was granted interlocutory orders in the case. These orders required the respondents to refrain from a variety of activity involving the use of dating websites, including the use of fictitious profiles, using photographs without permission and contacting website users.
http://www.acma.gov.au/WEB/STANDARD/pc=PC_311937

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