ACCC executes perfect hit on Telstra, Optus and Vodafone
After months of secret negotiations, Telstra, Optus & Voda have rolled over and ‘offered’ ACCC a court enforceable undertaking … equivalent to court injunctions … to stamp out false advertising in the broadband and telephony industry.
When legal advisers warn second and third tier telcos and ISPs about advertising content, the single most common retort is ‘Telstra gets away with it’ and ‘We saw an Optus ad like that’ and ‘But Voda says the same thing’.
It’s a pretty good argument. If the giants can do it, why can’t we ?
No mistake, this is the biggest telco-truth-in-advertising hit ever landed by the national regulator. Like all good commando raids, it seemed to come from nowhere. Only yesterday morning did rumours start to circulate that ‘something big’ was coming out of Canberra in the next 24 hours.
If Tiers 2, 3 & 4 don’t get their act together now, they can’t complain they’re being picked on. And ACCC has made sure that Telstra, Optus & Voda are motivated to keep their networks honest.
Senate Committee rubber stamps draft unfair contracts law
The Senate Standing Committee on Economics has received, and noted, strong submissions that part of the proposed new unfair contracts law can’t be right.
But so what ? The Committee majority finds no fault with the reasoning of law Professor Frank Zumbo, or the Consumer Action Law Centre … but it has still rubber stamped the Bill, virtually guaranteeing its passage into law.
And yes, the problem wording is the part we described as the Bill’s ‘bonkers bit’ back in June 2009. It’s disappointing that the Senate Committee system hasn’t been able to deliver a sensible outcome.
Bank of Queensland finances telco scam
Finance companies are racing against time to squeeze money out of Australian small businesses before a major Federal Court case shows that their contracts are unenforceable.
Two separate groups of telco companies promoted the notorious telco equipment / finance / servces bundling scam that has cheated businesses of millions of dollars, saddling them with massive debt for goods and services never supplied. One of these groups has been taken to court by ACCC, which is determined to smash its illegal conduct.
Watching on the sidelines are the financiers of the other group. It doesn’t take much to figure out that they won’t be able to recover their dodgy debts after the Federal Court case against the first group is over. So the finance companies are grabbing as much cash from innocent business operators as they can before the ACCC shuts the gate.
And Bank of Queensland’s equipment finance subsidiary is one of the players. Yes, that’e the same Bank of Queensland that denies all responsibility for the outrageous lending practices of failed Storm Financial.
SMS spammers suffer ‘no show’ judgment
We reported in January 2009 that ACMA had launched legal action against a bunch of companies and individuals alleged to be involved in an illegal SMS spam racket.
Five of the respondents to the Federal Court action have failed to take necessary procedural steps, and the Court has agreed to ACMA’s application for default judgments. After hearing evidence about the defaults and the original conduct, the Court has ordered:
- that parties including Mobilegate Ltd, Winning Bid Pty Ltd, Simon Anthony Owen, Tarek Andreas Salcedo and Glenn Christopher Maughan have breached the Spam Act and / or Trade Practices Act in various ways;
- that they be restrained from certain conduct, of the kind involved in the scam, for seven years; and
- the matter be re-listed for directions in relation to any penalty hearing as the above respondents on 18 September 2009.
The case against other respondents, who have defended the case, continues.
Spot Check: Are your price reduction ads putting you at risk?
NEW mobile phone!! WAS $399 NOW $199!!
BRAND NEW phone!! $199 – SAVE over 50%!!
Ads that show ‘two price’ or ‘was / now’ pricing are common, effective and legal … provided they’re not misleading. There are special rules about how to get ‘was / now” pricing ads right. While care needs to be taken, getting it right is relatively easy.
Getting it wrong can be costly, as the former owners of the Zamel’s jewellery chain have found – the ACCC took them to court over allegedly misleading ‘was / now’ price ads in one of their catalogues. In January 2009, the court handed down a fine of $380,000.
Optus toughens up mobile contract
Last December Optus incurred customer wrath, effectively torpedoing mobile access to cheap international VoIP services by charging them at international rates.
At the time, Optus insisted that:
International calls within the meaning of your Optus Mobile Standard Form of Agreement for all Timeless and Cap plans includes calls that re-route or divert to international numbers.
CSP Central asked Optus to tell us where the SFoA said that. We couldn’t be sure – because the document is a confused mish-mash – but as far as we could tell it said no such thing.
Apparently Optus didn’t feel too sure of its grounds, either. So it has bolted on a powerful, unbalanced new contract term that is sure to attract the interest of consumer regulators who have unfair contract terms legislation in their armory. Today, that’s only Victoria. On 1 January 2010, it will be every Australian State and Territory, and the ACCC.
ACCC hauls Optus into Federal Court
In the latest action in its war on trade practices non-compliance in the telco sector, ACCC has taken Federal Court action against a wholly owned subsidiary of Optus Mobile Pty Ltd.
Prepaid Services Pty Ltd supplies phone cards that are resold by an independent company Boost Tel Pty Ltd.
ACCC alleges that Prepaid and Boost were involved in false advertising.
Component pricing seminar notes available
Seminar notes from today’s popular ‘Component Pricing Law’ seminar at Logie-Smith Lanyon Lawyers are now available for download.
Delivered in our trademark style … plain english guaranteed … the seminar offered practical and expert insights into living harmoniously with the new trade practices law.
We’ll offer a repeat session soon … keep watching.
Consumer Bill’s bonkers bit
There’s an element in the proposed national unfair contract terms law that:
- isn’t in the Productivity Commission report that recommended the new law
- isn’t in the Victorian law that is already in force in Victoria
- isn’t in the United Kingdom law that served as the model for Victoria’s law, and
- is bonkers.
It makes no sense. It’s bananas. And the Explanatory Memorandum that accompanies the Bill admits as much.
National consumer law Bill hits Parliament
On 24 June 2009, the Government introduced the Australian Consumer Law Bill into Parliament. It represents the biggest shake up of Australian consumer law in a long time.
From 1 January 2010, the Government intends that we’ll have a national unfair contract terms law. ACCC will have power to demand that advertisers positively substantiate any claims they make. And there’ll be new penalties, enforcement powers and options for compensating consumers.
Stay tuned to CSP Central for plenty of news and expert commentary about the new law. We already have some detailed comments on one misconceived part of the drafting.
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