Latitude fined $1.55m for spam breaches

The ACMA commenced an investigation into Latitude Finance Australia’s (Latitude) compliance with the Spam Act 2003 (Spam Act) on 23 March 2022, following consumer complaints.

The complaints focused on allegations that Latitude sent SMS and email messages to customers between June 2021 and March 2022 without the ability to unsubscribe, and without consent after recipients made attempts to unsubscribe. 

In its investigation, ACMA found “at least” 3 million messages were sent without a functional unsubscribe facility, while 2,100 messages were sent without consent.

The messages — which were sent to existing cardholders — included promotions of Latitude’s products, such as 28⁰ Global, GO Mastercard, Gem Visa and CreditLine, along with mobile applications and reward programs.

The lender was revealed to have mischaracterised commercial emails and texts as “information only” messages, according to ACMA’s findings.

As such, Latitude was issued with a pecuniary penalty of $1,549,560, which has now been paid.

Along with the penalty, the ACMA has also accepted a comprehensive three-year court-enforceable undertaking from the lender.

Latitude is now required to appoint an independent consultant to review its compliance with spam rules, and to make improvements where necessary. The lender must also train its staff and report to the ACMA.

ACMA chair Nerida O'Loughlin stated that companies must accurately characterise their messages and “respect the choices made by their customers” in deciding whether or not they’d like to receive them.

“Companies cannot promote their products and services to customers under the guise of simply providing them with factual information,” Ms O’Loughlin said.

“Customers must be able to withdraw their consent and stop receiving commercial messages. That choice must be actioned within five days.

“Latitude failed on both these counts. It also did not make changes to its practices even after we alerted it several times that it may have compliance problems.

“These rules have been in force since 2003, so there is simply no excuse for Latitude — or any other business — to not have compliant practices.”

Latitude issued a statement outlining that it accepted the ACMA’s findings, while acknowledging that the fine and enforceable undertaking “reflect the volume and seriousness of the breach”.

However, the lender suggested that the breach “caused no financial harm to customers”.

“Latitude Financial accepts the finding of the Australian Communications and Media Authority’s (ACMA) investigation of compliance with the Spam Act and apologises to customers,” it said.

“While the ACMA finding relates to communications which caused no financial harm to customers, Latitude acknowledges that the fine and enforceable undertaking reflect the volume and seriousness of the breach.

“Latitude has agreed to all directions from the ACMA, including the appointment of an independent consultant to review current procedures, policies, training and systems, as well as additional training for staff.

“Latitude has improved its processes around electronic communications ahead of the independent review.”

Almost $5 million in penalties has been collected from business breaching telemarketing and spam laws over the last 18 months.

The ACMA has issued five formal warnings and accepted 12 court-enforceable undertakings at this time. Repeat corporate offenders could face up to $1.1 million per day in court-imposed penalties.

Latitude is the latest personal lender to be taken to task for alleged breaches of the law. Earlier this year, ASIC launched a civil lawsuit against online personal lender Sunshine Loans after it allegedly collected more than $320,000 in prohibited fees.

ASIC alleged that the online personal lender charged the fees to customers when providing small amount credit contracts, in new civil penalty proceedings filed in the Federal Court.

Sunshine Loans allegedly charged the fees when customers sought to reschedule or amend the payments of their contracts more than 9,000 times, in circumstances ASIC alleged where the fees were prohibited under the National Credit Code.

[RELATED: ASIC slaps online lender with lawsuit]