Web hosting business stung with $50k fine over alleged checkout ‘trap’
A website registering and hosting company has been fined $56,340 after it allegedly led customers into a “subscription trap”.
Australia’s watchdog, the Australian Competition and Consumer Commission (ACCC) issued Dreamscape Networks International with three infringement notices after it allegedly mislead customers over claims about two “free” products that were added automatically at checkout.
Dreamscape owns and operates the Crazydomains.com.au website, where they sell services hosting websites and register web domains, coming to the ACCC’s notice over their checkout practices.
The ACCC said that for nearly four years between October 2019 and July 2023, the website made claims that its “3-month website builder” product and an “additional domain name registration” were free.
At first, these products were added to customer’s shopping carts and made to look like they were free additions.
They were tagged as “free”, “3 months free gift”, or “1 year free gift”.
All three products contained an unlabeled automatic renewal feature, which would charge users after the free period ended.
The ACCC said that the business failed to make it clear to customers that these “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.
“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,” Carver said.
Another product offered by the company was a “Domain Privacy” product to customers that would ‘lock down from hijacking and hides your personal information‘.
The ACCC said that in fact, customers who thought they were buying this were actually sold a different product that did not hide any user information.
The ACCC said that Dreamscape had updated disclosure around the autorenewal and cost of its products.
Products in user’s carts on the website now read: “FREE until Apr 2024. Renews for 3 months at $12.38.”
Dreamscape Networks International has been approached for contact.
