The Commerce Commission has issued a warning to the NZ Trustees Association Charitable Trust about invoices it sent to registered New Zealand charities for membership services.
The Commission found the Trustees Association was likely to have breached the Fair Trading Act by invoicing the charities for membership services as the services were unsolicited and the Association had failed to clearly inform the charities they were under no obligation to pay the invoices. They also found the invoices falsely represented to the charities that they had agreed to acquire the Association’s membership services.
The Association obtained the charities’ contact details from publicly available information and emailed them donating a free membership to the Association for around six months (finishing on 1 April 2016).
The charities received email bulletins from the Association throughout the six months, despite the fact that they had not accepted the donated membership. These bulletins contained a hyperlink for recipients to unsubscribe, but it was never made clear that they needed to opt out of the membership if they didn’t want to be charged.
If the charities hadn’t sent an email to the Association to unsubscribe from its communications before the donated free membership term ran out they were sent invoices for $158 for an annual membership subscription.
Competition and Consumer General Manager, Antonia Horrocks, says the charities which complained to the Commission said they received an invoice for a membership which they had not agreed to purchase.
“In our view, the Trustees Association made a misleading representation that these charities had agreed to acquire paid membership services from the Association when they hadn’t. The invoices also failed to inform recipients that they were under no obligation to pay it.”
The Trustees Association responded to the Commission’s enquiries by saying it did not believe it had breached the law. In its view, the donated membership provided recipients with the option of unsubscribing.
The Commission says it does not agree that failing to unsubscribe from the Trustees Association’s email communications meant that the charities had agreed to subscribe to the Association on an annual basis. It was never disclosed to the charities that a failure to opt-out of the donated membership/email communications would result in them being invoiced for continued membership.
On its website, the NZ Trustees Association Charitable Trust describes itself as having the principal objective of providing a free helpdesk and education to the public, trustees, and beneficiaries.
The warning letter can be viewed on the Commission’s Enforcement Response Register.