ASX-listed tradesperson platform Hipages Group has conceded to regulator the Australian Competitors and Shopper Fee (ACCC) that it probably engaged in deceptive or misleading conduct over 4 years involving its subscription renewals and termination charges.
The ACCC mentioned the corporate’s actions had been in breach of the Australian Shopper Regulation between October 2018 to January 2022 as a result of Hipages did not adequately disclose contract phrases that allowed it to routinely renew subscriptions and cost an early termination charge.
Hipages (ASX: HPG) is a web-based gross sales lead platform for tradies who pay month-to-month subscription charges to cite on jobs. The platform has greater than 34,000 subscribers paying between $25 and $999 monthly for six -12 month subscriptions.
It listed on the ASX in November 2020, elevating $100.4 million at $2.45 a share. Hipages at present trades at round $0.725 a share.
Rupert Murdoch’s Information Corp is the corporate’s greatest shareholder, having nabbed a 25% stake when the tech firm was nonetheless personal in 2015.
The ACCC has been inspecting what they name ‘subscription traps’ – the place on-line companies make it troublesome for customers to cancel subscription companies, alongside sufficient disclosures.
ACCC Deputy Chair Mick Keogh mentioned hipages Hipages cooperated with the regulator throughout its investigation and subsequently agreed to extra clearly disclose its subscription contract phrases, and offering extra e-mail and SMS reminders to subscribers forward of any upcoming automated renewal.
“Many subscribers had been unaware that they needed to particularly decide out of Hipages’ automated 12-month renewal, and that there was solely a really quick cooling off interval through which they might keep away from paying an early termination charge,” he mentioned.
“When some folks tried to cancel their auto-renewed contracts, they had been informed they must pay out the complete 12-month time period.”
Keogh mentioned the rise of on-line marketplaces had led to a rise in “sneaky ways” corresponding to subscriptions which are troublesome to flee.
“Companies, together with on-line platforms, should be clear and up-front with their prospects about vital contract phrases corresponding to renewals and cancellations,” he mentioned.
“Failure to take action dangers breaching the Australian Shopper Regulation and will lead to enforcement motion.”
Hipages additionally admitted that it possible contravened the buyer legislation by making false and deceptive representations to some subscribers over a 12 month interval between April 2020 and 2021. The corporate informed some subscribers that they wanted to take extra steps to cancel their contract and that the corporate had the fitting to implement cost for an extra time period.
However that was not true as a result of the subscribers had already given legitimate discover of cancellation earlier than the automated renewal date.
The corporate has additionally dedicated to a evaluation its complaints dealing with system, alongside transferring to resolve excellent complaints by subscribers.
CEO Roby Sharon-Zipser mentioned Hipages has improved its subscriber expertise.
“After our first contact with the ACCC, we moved shortly to evaluation and implement adjustments to our processes,” he mentioned.
“We’ve additionally revised our contract phrases in order that they’re clearer when tradies be a part of the platform; we’ve put in prolonged cooling-off intervals to provide tradies extra time; and total we maintain ourselves to account to ship a extra clear onboarding expertise.”