Mobile Company Targets Indigenous Communities With No Network Coverage

Mobile Company Targets Indigenous Communities With No Network Coverage
Mobile Company Targets Indigenous Communities With No Network Coverage
  • Repeated misleading conduct
  • Judge says it was ‘unscrupulous’ conduct
  • Company in liquidation

The Federal Court in Darwin today penalised EDirect Pty Ltd trading as VIPtel Mobile $2.5 million for telemarketing and ‘voice’ contracting with 350 customers from remote and regional communities across Australia who had no network coverage where they live.

EDirect made misleading and deceptive representations to customers that it had verified that there was coverage at the customers’ nominated address when it had not verified this, and when there was no such coverage.

This was repeat conduct by EDirect as the Federal Court gave Judgment against them in 2008 for telemarketing phone services into no coverage areas.

The complaint which prompted the ACCC’s intervention came from the remote North Queensland Indigenous community of Aurukun where customers were having automatic deductions made from their bank accounts for a phone service unavailable in their community. The ACCC’s investigation revealed EDirect telemarketed phone services through the Optus network.

Justice Reeves described the conduct as ‘unscrupulous’ and stated “I consider the amount of the total pecuniary penalty to be imposed on EDirect should be at such a level as to make it, to use the descriptor adopted by Logan J, commercial suicide, for any other operators in mobile telephone industry, or elsewhere, to even contemplate taking the risk of engaging in similar conduct.”

He further stated “I consider the penalty should act as a general deterrent to companies who use telemarketers in the way that occurred in this case. If such companies, whether mobile telephone companies or others, do not properly supervise and control their telemarketers to ensure that they comply with Australia’s consumer protection laws they can expect to be dealt with severely”

Rod Sims, chairman of the ACCC said “This is grave and intolerable conduct in the Telco industry. I call on the major telecommunications carriers to take appropriate steps to ensure that their resellers lawfully deal with consumers.”

“The Australian Consumer Law protects people wherever they live. I have a message for traders who may think that they can get away with breaches of consumer laws in remote parts of the country. The ACCC conducts outreach and works collaboratively with community groups and State and Territory Government agencies with a presence on the ground in the remotest parts of Australia.”

“Ensuring Indigenous consumers are well placed to exercise their rights is a major priority for the ACCC. We will vigorously investigate breaches and seek large penalties from the Court when breaches impacting on Indigenous consumers are detected.”

The ACCC remains concerned about conduct in the telecommunications sector in relation to the proper disclosure and clarity of key terms and conditions to consumers. Recent Australian Consumer Law actions in the telecommunications sector have included issuing infringement notices totalling in excess of $260,000 and a $3.61 million judgement against Optus for misleading and deceptive conduct.

Whilst EDirect is now in liquidation the ACCC successfully negotiated the payment of over $100,000 in consumer refunds from both EDirect and the company which took over the EDirect’s assets.

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