ACCC accuses mobile SP VIPtel of misleading and harassing customers

Stuart Corner
Thursday, 19 August 2010 14:44

IT Policy - Regulation

The ACCC has launched a legal action against mobile service VIPtel (a trading name of EDirect Pty Ltd), a mobile service provider using the Optus network, with a long list of allegations of horrendous unconscionable and misleading telemarketing practices.

Included in the list of allegations are: requiring customers to only answer yes or no to questions designed to obtain their consent to enter into the contract, along with composing statements and questions in a manner designed to obtain a positive affirmation from the customer; being aware that some potential customers had a disability and not taking proper steps to ensure those persons understood the terms of the contract.

The ACCC alleges that EDirect "knew, believed or could reasonably foresee that its sales methodology would be more likely to secure consent to contracts from persons who were unable to understand financial and/or legal matters quickly or in any depth."

And the list goes on. The ACCC further alleges that: "EDirect's sales method was designed to continue to pursue a sale, and to obtain a customer's consent to the contract and to permit EDirect to make direct debits from a customer's account even when EDirect had identified or believed or had reason to believe that a customer: had a disability; could not afford the mobile phone plan being offered; did not want the mobile phone plan; was clearly distressed or upset; wished to end the telemarketing call; was unwell; was unable to understand or had difficulty understanding the speech of the telemarketer; was unable to understand the terms and conditions of the contract; and/or may not have the legal capacity to enter into the contract."

The ACCC is seeking declarations and injunctions to stop any contravening conduct and improve EDirect's business practices, and court costs.

EDirect - which says on its web site that it "aims to set the highest standards in the telecommunications industry in Australia for both the goals it aims to achieve and the manner in which these goals are to be achieved'¦[and] strives incessantly and tirelessly to be number one among its competitors" - has advised the ACCC that it will provide undertakings to the court, in lieu of the ACCC pursuing interim interlocutory orders.

The first directions hearing will be before Justice Reeves in the Federal Court in Darwin on 17 September 2010.