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Business penalised for adding ‘free gifts’ in checkout with auto-renewals

Dreamscape Networks International Pte Ltd has paid $56,340 in penalties after the ACCC issued it with three infringement notices for allegedly making false or misleading representations about two ‘free’ products automatically added at checkout, and about the benefits of its Domain Privacy product.

Dreamscape owns and operates the Crazydomains.com.au website, which offers a range of services including domain name registration, web hosting and web design.

Between October 2019 and July 2023, the website advertised that its ‘3-month website builder’ product and an ‘additional domain name registration’ were free. These products were automatically added to a customer’s shopping cart as ‘free’, ‘3 months free gift’ or ‘1 year free gift’ but had an auto-renewal feature that meant customers would be charged fees after the free period ended.

Dreamscape did not make it clear to consumers at the point of sale that the ‘free gifts’ were subject to auto-renewal and fees.

“Businesses must provide consumers with accurate information about the products or services they are purchasing,” ACCC Commissioner Liza Carver said.

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“In this case, consumers may have believed they were receiving a free product in addition to the one they were purchasing because they were not given clear information about ongoing subscription costs for these so-called free products.”

“Subscription traps are an area of concerning conduct and the ACCC will not hesitate to take action against businesses that utilise these tactics in breach of the Australian Consumer Law,” Ms Carver said.

The website also offered a Domain Privacy product to customers purchasing a .au domain name that would ‘lock down from hijacking and hides your personal information’. In fact, consumers that purchased the Domain Privacy product were sold a different product that did not hide contact names or email addresses from the public domain. This conduct occurred between October 2019 and November 2023.

“As a result of the ACCC’s enforcement action, Dreamscape has updated disclosure around the autorenewal and cost of its products, and the uses of its privacy products,” Ms Carver said.

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