Friday, 15 July 2022 08:26

Former telco reseller Red Telecom meted with $450k fine for failing to pay 7 customers

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Limni Enterprises, formerly known as Red Telecom, has been fined $450,000 for allegedly failing to pay $63,000 to seven customers.

Its sole director, Nicholas Kontaxis, was also hit with a $115,125 fine.

According to an ARN report, the Australian Communications and Media Authority (ACMA) initiated Federal Court proceedings in December 2019 for failing to comply with the Telecommunications Industry Ombudsman's decision to pay $63,000 to seven customers—six businesses and one individual.

According to the ACMA, in October 2020, Red Telecom's customer base was sold. Then it changed its name to Limni Enterprises and went into liquidation.

Despite this, the Federal Court still maintained there was still strong public interest to impose penalties on the telco reseller and Kontaxis.

ACMA chair Nerida O'Loughlin stressed all telcos supplying services to residential and small business customers in Australia must join the TIO scheme and must comply with the Ombudsman.

“This judgment serves as a reminder to members of the TIO Scheme that there are serious consequences for failing to comply with the TIO Scheme. It also makes it clear that directors who are responsible for ancillary contraventions may receive tough penalties, even where the company goes into liquidation," she said.

“The Court has sent a clear message that failing to comply with a TIO decision will result in penalties that provide a clear deterrent," she added.

According to the same ARN report citing court documents, Kontaxis thought that TIO decisions could be "overturned" and likened it to a parking ticket, saying, "just like you get anything else in life, there is an avenue for appeal."

Justice Melissa Perry, the ruling judge of the case, said Red Telecom demonstrated a lack of respect for the TIO scheme, a lack of consideration for customers, and failed to cooperate with the ACMA until it was too late.

Her Honour considered that there was a culture within Red Telecom that was “antithetical to compliance” and accepted the ACMA’s submission that “the conduct must be discouraged in the strongest possible terms."

This first appeared in the subscription newsletter CommsWire on 14 July 2022.

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Kenn Anthony Mendoza

Kenn Anthony Mendoza is the newest member of the iTWire team. Kenn is also a contributing writer for South China Morning Post Style, and has written stories on Korean entertainment, Asian and European royalty, Millionaires and Billionaires, and LGBTQIA+ issues. He has been published in Philippine newspapers, magazines, and online sites: Tatler PhilippinesManila BulletinCNN Philippines LifePhilippine StarManila Times, and The Daily Tribune. Kenn now covers all aspects of technology news for iTWire.com.

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