Australian Regulatory Compliance Review

Preparing for 2010

Thank you for reading our news services over the past year. On behalf of the Langes+ team I wish you a happy, successful and healthy 2010.

If you are taking an extended break, we look forward to talking to you on your return.

Langes+ services will be available over the holiday season.

Predictions for 2010? The one thing I can predict for 2010 (apart from a Commonwealth election) is more demands on directors and managers and more regulatory change.

Over the next few weeks ask yourself what is your most pressing challenge (business, legal or otherwise) that you'd like to overcome in the next year and think about whether you are adequately prepared.

Langes news for mobile devices

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Privacy of personal information online

Shortly after the Government's response to the Australian Law Reform Commission's Privacy Report. ACMA released its research report Attitudes towards use of personal information online.

Key findings include:

• There was an acceptance among research participants that using information and communication technologies means sharing personal information. The type of, and level to which, personal information is disclosed is seen to be within an individual’s control and a matter of personal choice.
• Users made informed decisions about the risks of disclosing personal information based on the context of their interactions, with two types of situations:
  - transaction provision – disclosure of information necessary to obtain a good or service, e.g. internet banking, online shopping, eBay; and
  - networking or social provision – where information disclosure is made within an online community to share or exchange opinions, beliefs and personal details, e.g. Facebook.

Respondents saw a distinction depending on nature of information users are providing. In the case of information provided in the course of transactions, a service provider such as a bank was expected to provide good security, whereas on social networking sites where the service provider is merely hosting the content, security breaches are accepted.

• Participants on the whole were generally well informed about both risks to their online privacy and strategies to protect their personal information. However, there was a widespread perception that breaches are inevitable, resulting in an accepting attitude towards their ability to fully protect their personal information online.
• Risks identified included identity theft, threat to personal safety, invasion of privacy, unwanted communications such as spam, financial loss, fraud and damage to reputation. Severity of these risks was assessed taking into account perceived likelihood of the information being misused and the severity of consequences.

Interestingly the Government's response to the Privacy Report only briefly dealt with the impact of technology on privacy: issues such as radio frequency identification (RFID), biometric systems and data matching will be left to guidelines, the internet was mentioned in passing and a recommendation about electronic health records was accepted in principle. Identity theft was only discussed in the context of credit. 

ACMA v Mobilegate SMS spam penalty

The Federal Court has handed down its penalty in ACMA v Mobilegate (previously discussed here)

According to ACMA the Federal Court has awarded penalties totalling $15.75M against the following defendants:

• 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

A penalty hearing against 3 other defendants will take place on 30 November.

ACMA instituted proceedings against eight respondents in the Federal Court in December 2008, alleging contraventions of both the Spam Act and the Trade Practices Act in relation to premium SMS chat services. 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.

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.

ASIC consults on online financial services disclosures

ASIC has issued Consultation Paper 121 seeking feedback on proposals for changes to online financial services disclosures.

The proposals include:

• relief to give providers certainty about giving product disclosure statements, financial services guides and statements of advice to retail clients via hyperlinks and references to website addresses; and
• good practice guidance on online disclosure.

The Consultation Paper also discusses whether paper disclosure or online disclosure should be the default method of delivering financial services disclosures.

Generally, under the current law, a provider needs to obtain a retail client’s express agreement before delivering financial services disclosures online (i.e. paper disclosure is the default method of delivering disclosures).

Comments close on 11 December 2009

Draft mobile premium services code

The Communications Alliance has released a draft Mobile Premium Services Industry Code and Guideline for comment by 12 December 2008.

Mobile premium services are optional services such as ringtone downloads, competitions and news updates, which often cost more than a standard SMS, MMS or phone call.

The Telecommunications Industry Ombudsman received nearly 14,000 complaints about mobile premium services during 2007/08.

Following the conclusion of the consultation period and after consideration of stakeholder comments, the Communications Alliance is expected to submit the Mobile Premium Services Code to ACMA for registration, which will give the code legal force.

The Communications Alliaqnce has also published the 19SMS service which provides consumer information.

Electronic Transactions Review

Attorney-General Robert McClelland has released a discussion paper on the proposal that Australia accede to the United Nations Convention on the use of Electronic Communications in International Contracts.

Developed by the Commonwealth in collaboration with the States and Territories, the paper proposes that amendments be made to Australia’s electronic transactions regime to bring our laws into line with new international standards.

Currently, the Electronic Transactions Acts in each jurisdiction are based on the 1996 Model Law on E-commerce. The UN Convention on Electronic Communications updates the Model Law to address significant advancements in technology.

Submissions close on 30 January 2009.