Melbourne nightclub cops $15,500 fine for 50,000 breaches of Spam Act

The owners of a Melbourne nightclub have been fined $15,500 by the communications watchdog for more than 50,000 breaches of the Spam Act after it sent promotional texts without an opt-out function.

The Brown Alley nightclub, which forms part of the Colonial Hotel in the Melbourne CBD and is owned by Minardi, sent a series of texts to consumers promoting its upcoming events in December 2012.

However, many of the messages did not include information on how to opt-out of receiving future messages and after receiving 14 complaints about the texts the Australian Communications and Media Authority launched an investigation.

This wasn’t the first time Brown Alley had breached the act. The ACMA investigations manager for unsolicited communications, Julia Cornwell-McKean, told SmartCompany the nightclub had previously been issued with five other warnings.

“We had been liaising with this company over three years having received complaints from people about its messages,” she says.

“We issued five warnings. We’re reasonable, but enough is enough.”

Since 2010 the ACMA had received 30 complaints about Brown Alley’s text messages.

“We discern how we investigate on a case-to-case basis,” Cornwell-McKean says.

“We understand in some cases businesses find it hard to avoid. With daily deals sites people sign up but then decide they don’t want the emails anymore and end up reporting them as spam, but in this case there were five warnings but it put in no effort to fix the problems.”

SmartCompany contacted Brown Alley, but received no response prior to publication.

Cornwell-McKean says in some cases businesses don’t rectify the problem because they don’t take the warning seriously.

“But we are serious and it [Brown Alley] ended up with a $15,500 fine.”

Text message marketing accounts for 4% of the complaints the ACMA receives each year. Last year the ACMA received around 15,000 complaints and sent 7000 informal warnings.

Of the businesses which received warnings, Cornwell-McKean says most were compliant.

“Sixty-nine per cent didn’t get a second warning. Most businesses really just need to be reminded and they clean up their act,” she says.

Cornwell-McKean says while text message marketing isn’t used as often as other forms such as email, it’s generally more effective but also more irritating.

“When people get SMS spam they are far more irritated than when they receive email spam. SMS messaging for commercial reasons can be way more successful though, because when you get a text you can’t resist reading it, whereas emails you can wait forever,” she says.

Cornwell-McKean says all commercial text messages need to have an opt-out function.

“As a business, not providing this function means your reputation will be at risk. Customers tell us they want to be able to opt-out and they want it to be simple,” she says.

In November 2011 the Urban Agent nightclub also came under fire from the ACMA over breaching the Spam Act. It accepted an enforceable undertaking from the nightclub of $4,500.

This case comes on the back of online auctions site GraysOnline copping a record-breaking $165,000 penalty for spamming last week.

The penalty was the largest out-of-court fine since the legislation came into effect 10 years ago.