Wesfarmers cops MASSIVE fine for 212,471 breaches of the law

Watchdog catches Kmart red-handed breaking the rules literally hundreds of thousands of times.

| More on:
A loudspeaker shoots out the words FINED against a blue backgroun

Image source: Getty Image

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Wesfarmers Ltd (ASX: WES)'s retail chain Kmart has paid a $1,303,500 infringement notice after an investigation by the communications watchdog.

The Australian Communications and Media Authority (ACMA) revealed Thursday morning that it started its probe after complaints from consumers about Kmart spamming them.

The enquiry found the retailer sent 212,471 messages between July last year and May this year to customers who had already unsubscribed, which is in breach of spam laws.

Australians are "frustrated and angry" with brands not respecting their unsubscribe wishes, according to ACMA chair Nerida O'Loughlin.

"When a customer decides to opt out of a marketing mailing list, businesses are obliged to fulfil that request. 

"The rules have been in place for nearly 20 years and there is simply no excuse."

O'Loughlin added that the Kmart case was especially disturbing because "it went on for such a significant period", even after ACMA notified it.

"Kmart was given more than enough notice [that] it may have a compliance issue, and it should have done more to address its problems before we had to step in and investigate."

Wesfarmers oversaw 'a combination of technology, system and procedural failures'

ACMA announced that the breaches occurred because of "a combination of technology, system and procedural failures".

According to Australia's spam rules, businesses must have consent from consumers to send them marketing material and unsubscribe requests must be actioned.

As well as the $1.3 million fine, Kmart has given a two-year court-enforceable undertaking that an independent consultant would review its spam compliance.

"Any business that conducts e-marketing should be actively and regularly reviewing its processes to ensure it is complying with the rules," said O'Loughlin.

Wesfarmers shares are up 12.2% year to date, while paying out a dividend yield of 3.7%.

ACMA is on a tear with catching out spam breaches in recent times.

Other big names caught red-handed have included DoorDash Inc (NASDAQ: DASH), Ticketek, and Uber Technologies Inc (NYSE: UBER).

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A woman stares at the candle on her cake, her birthday has fizzled.
Share Market News

Here are the top 10 ASX 200 shares today

The markets ended the trading week on a sad note today.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Core Lithium share price hits a multi-year low: Will the tide change soon?

Are analysts now seeing value emerge from the lithium miner's shares?

Read more »

Four young friends on a road trip smile and laugh as they sit on roof of their car.
ETFs

Records tumble! Hot ASX ETFs smash all-time highs again on Friday

It's a little strange to see these ETFs hit new highs on a red day for the ASX...

Read more »

A group of three men in hard hats and high visibility vests stand together at a mine site while one points and the others look on with piles of dirt and mining equipment in the background.
Opinions

Down 40% in under 3 years, is the Lynas share price due a bounce?

Is there any hope for Lynas shares?

Read more »

Three exuberant runners dash towards the camera. One raises her arms in triumph; another jumps in the air with arms raised. The third runner gives a satisfied smile.
Share Gainers

3 ASX 200 shares going gangbusters in June

ASX 200 investors have sent these three stocks soaring in June. But why?

Read more »

A man in a suit looks serious while discussing business dealings with a couple as they sit around a computer at a desk in a bank home lending scenario.
Share Market News

Is there any chance of an interest rate cut in Australia next week?

Here's what the experts think will happen.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

a business man in a suit holds his hand over his eyes as he bows his head in a defeated post suggesting regret and remorse.
Share Fallers

Why Core Lithium, Deterra Royalties, Northern Star, and Opthea shares are dropping

These shares are ending the week deep in the red. But why?

Read more »