KEY POINTS:
Alt TV has promised it will disclose the cost of sending text messages and will accurately describe its prizes following an investigation by the Commerce Commission.
The Commerce Commission said yesterday that the Auckland-based niche broadcaster had failed to inform viewers that the cost of sending a text
message to vote in polls, enter competitions, request music videos, and interact with presenters cost 99 cents per message, which is higher than the cost of sending a normal text message.
It also ran a competition where viewers could text the word "winner" to enter a draw to win $10,000. However, the actual prize on offer was an Instant Kiwi ticket, costing $1, but with a potential prize of $10,000.
Alt TV has settled with the Commerce Commission and agreed that not disclosing the cost of text messages and misleading viewers over the nature of the prize offered in the competition may have contravened sections of the Fair Trading Act.
It has agreed to clearly state the cost of text messages, and that prizes offered in future competitions will not be misleading.
Alt TV was recently ordered off air and fined $5000 after explicit and abusive texts were mistakenly screened.
Commerce Commission chair Paula Rebstock said yesterday that an increasing number of organisations used texting as a means of promoting to and communicating with consumers.
"Organisations that encourage people to interact with them by text need to ensure that consumers are aware of all associated costs of sending texts. It doesn't matter whether the organisation is big or small, the rules remain the same," she said.
"Many companies use competitions to promote themselves. Gifts and prizes must always be described accurately, and the description must not mislead people into thinking that what they stand to gain or win, or their chance of winning, is better than it actually is. It is not acceptable that Alt TV led people to believe that they were entering a draw to win $10,000 when in fact they were spending 99 cents for the possibility of winning a $1 lottery ticket."
Alt TV president David Kennedy told the Herald the station was pleased with the outcome and had new procedures in place to let people know the cost of text messaging.
The cost of the text messages was not disclosed between at least May of this year and October 16. The competition to win $10,000 was run on most Friday nights between March of this year and September on the electronica/dance show The Playhouse.
VOLUNTEER TV
* Alt TV is an independently owned station based in Auckland. It broadcasts nationwide on channel 65 on Sky Television.
* It's been broadcasting since December 2005 and is staffed mainly by volunteer presenters.
* The majority of directors and producers are also volunteers.