ACCC takes VIPtel to Federal Court

Watchdog claims misleading and unconscionable conduct through high-pressure and relentless sales method

The Australian Competition and Consumer Commission (ACCC) is taking mobile phone provider VIPtel to Federal Court for alleged misleading and unconscionable conduct.

The ACCC is seeking declarations and injunctions from VIPtel, which also trades as EDirect, to ”stop any contravening conduct and improve EDirect's business practices, and court costs”.

The ACCC alleges EDirect misled customers when making telemarketing calls for mobile phone packages by telling them family and friends “loved the calling plan” they were being offered and that the customers had “pre-approved credit” and could therefore afford the plan.

The watchdog also alleges VIPtel was unconscionable in using a high pressure and relentless sales method.

In a statement the ACCC listed the following strategies used by the company:

  • “conveying information about numerous contractual terms in a manner which made it difficult for customers to understand,
  • “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,
  • “keeping customers on the phone for lengthy periods of time and transferring customers between telemarketers,
  • “not providing customers with an opportunity to read the terms and conditions of the contract before providing their consent to enter into a contract,
  • “not giving customers the opportunity to consider whether the mobile phone plan they were agreeing to was suitable or affordable to them, or obtain advice about the plans,
  • “being aware that some potential customers had a disability and taking no, or no proper, steps to ensure those persons understood the terms of the contract, and
  • “failing to have in place any mechanism to identify improperly obtained agreements.”

The sales process was intended to permit EDirect to make direct debits out of customer accounts, the ACCC alleges, even if the company knew the customer could not afford it, had a disability, could not understand or simply did not want the plan and wanted the telemarketer to go away.

EDirect has told the ACCC it will provide undertakings to the court to keep a record of telemarketers’ calls that shows the terms of mobile call plans were accurately explained and that they had no reason to believe the customer did not wish to enter into an agreement.

The court case will be heard by Justice Reeves in the Federal Court of Darwin on 17 September.

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Tags Australian Competition and Consumer Commission (ACCC)VIPtelEDirect

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