‘Sneaky’ Kogan ticked off by Kiwi regulator

Sean Cao

29th Oct 2024

Kogan Australia, the parent of online electronics retailer Dick Smith, has received a warning from the New Zealand Commerce Commission for potentially misleading customers about its online membership subscription.  

The regulator launched an investigation after consumers complained they were unknowingly given a 14-day free trial of the ‘First’ membership. The trial led to a payment obligation to pay $149 annually or $14.99 monthly once it ended.

Most of the complainants did not realise they had signed up for the trial until they received a $149 charge.

“The pre-selection of the “First” membership was not obvious on Dick Smith’s website, which meant it was unclear to consumers that they were signing up to a subscription,” explained Vanessa Horne, Commerce Commission Competition, fair trading, and credit GM.

“To avoid automatically subscribing, a customer would have to first recognise the tick box had been selected, which meant they were signed up, and then actively de-select the option,” she added.

The company used the pre-selected tick box to add a First trial to all eligible consumers’ shopping carts from July 3 to September 19 last year.

After the commission raised the issue, Dick Smith stopped using pre-selected fields and now uses a sign-up method that requires consumers to actively sign-up.

“The commission is encouraging consumers to keep a look out for sneaky subscriptions when shopping online. As we head into the holiday shopping season, it’s important to take a moment to check exactly what’s in your cart before purchasing,” added Horne.