Junior telco One.Tel and fellow carrier Primus have been slammed in the Federal Court after the competition watchdog took them to task for malpractice.
The Australian Competition and Consumer Commission (ACCC) accused One.Tel and Primus of contravening the Trade Practices Act by "slamming" consumers.
Slamming refers to the act of deceptive door-to-door and tele-marketing methods that result in consumers' telephone service being illegally transferred.
Penalties imposed on the two players include a AU$500,000 payment by each towards a public awareness campaign to put a lid on telecommunications slamming, as well as a compensation payout to each customer they've slammed.
The telcos have also undertaken to pay the ACCC's legal costs, as well as review their current business practices.
"The activities that were the subject of the ACCC's Federal Court Action included misleading and deceptive conduct, unconscionable conduct in taking unfair advantage of consumers with disabilities and the elderly," ACCC chairman, Professor Allan Fels said.
The ACCC claimed that agents used by One.Tel and Primus had preyed on consumers with limited English speaking skills as well as those that "clearly could not ascertain the effect or meaning of what they were signing".
"The pattern of this conduct extended to taking unfair advantage of elderly and infirm members of the community," the ACCC said in a statement.
One.Tel admitted that its agent, Axxess, had misled consumers by asking that they sign a piece of paper to say they were interested in finding out more about One.Tel's services. In fact, the consumer was signing over their telephone services to One.Tel.
Axxess was appointed as a dealer for the door-to-door marketing of One.Tel's 'Switch' product - a local call package that offers 17.5cent local calls to residential customers.
Axxess' six-month trial period, which began in April, has since been terminated and One.Tel claims it has lodged intentions to take legal action against its former agent in the NSW Supreme Court.
Whilst legal proceedings are pending against Axxess, One.Tel refused to comment on the number of customers its agent slammed or how much compensation it has had to pay.
All the complaints received by One.Tel "have been resolved and none will suffer financial loss", according to the company.
The ACCC commenced investigation into slamming in the middle of the year following "a proliferation of complaints" to the Telcommunication Industry Ombudsman (TIO).
The vast majority of the complaints were against One.Tel and Primus.
"Slamming has been on the increase for quite some time," Kerryn Garner of the Telecommunications Industry Ombudsman (TIO) told ZDNet.
In the 12 months to June 30 complaints about customer transfers accounted for just over 14 percent of all complaints the TIO received, compared to 9.7 percent for the corresponding period of the previous year.
70.4 percent of those complaints were about slamming, according to Garner.
"The issue [of slamming] has been pretty hot for the last 18 months," Garner said. "It is our fastest growing area of complaints."
The TIO puts increased slamming down to the growing choice of telecommunications carriers for consumers, which creates "a greater opportunity for misunderstanding and misrepresentation by [telecommunications] companies," Garner said.
This is the first time the ACCC has taken up the issue of slamming in the Supreme Court and ACCC investigation into the agents is ongoing.
Primus was unavailable for comment at publishing time.
after recieving a 'free trial disc' for primus, we stupidly put it in to have a look. Although the install was not completed, now we can't get the damn thing off the computer---programme uninstall doesn't recognise its existance. Any help or advice?