Swiss company misleads Australian businesses in relation to international fax directory

Swiss company, IT&T AG, engaged in misleading and deceptive conduct and sought payment from Australian businesses for unauthorised listings in its International Fax Directory, in breach of the Trade Practices Act 1974, the Federal Court has found.

Proceedings were instituted against IT&T AG by the Australian Competition and Consumer in March 2002. Documents detailing the ACCC's allegations were served on the company in Switzerland. IT&T AG did not make an appearance.

The court found that:

1. the words, images and statements contained in the company’s website, www.ittag.com, created the overall impression that:
• each of the Australian businesses listed in the IT&T International Fax Directory published on the website, had corresponded with IT&T AG with a view to becoming a listed member in the directory and
• each of the Australian businesses had given their authority or consent for their names, addresses and other particulars to be listed in the directory
  when in fact, that was not the case
2. from May 2001 until about March 2002, IT&T AG wrote to Australian businesses seeking payment - typically for "US$995.00" and offering a "3% discount if payment made within 14 days" - for listing those businesses in the directory.

More than 5,000 Australian businesses were listed on the IT&T International Fax directory. Of those, none of the 136 Australian businesses contacted by the ACCC, confirmed they had authorised their particular entry in the directory.

Justice Robert Nicholson of the Federal Court:

• declared that IT&T AG had contravened sections 52 and 64(3) of the Act
• granted injunctions restraining IT&T AG from sending invoices to Australian businesses and from listing in the Directory the names of Australian businesses that do not give it written authority to do so, and
• ordered that IT&T AG pay costs.

ACCC Chairman, Mr Graeme Samuel, welcomed the court's decision.

"IT&T AG's activities have come to the attention of consumer protection agencies in Switzerland, the United States and the United Kingdom. This decision not only marks the court's disapproval of IT&T AG's conduct which, in this case, was directed at Australian business consumers, but will also generally assist consumer protection and law enforcement agencies overseas to take action to combat cross-border fraud and misleading conduct, particularly through the Internet*.

"The ACCC wishes to acknowledge the assistance provided by the State Secretariat for Economic Affairs in Switzerland (SECO)".

Background

The problem of cross-border fraud and misleading conduct in the international community has prompted consumer protection and law enforcement agencies to establish mechanisms for international co-operation to protect consumers.

The ACCC is a member of the International Consumer Protection and Enforcement Network (ICPEN), a network of consumer protection authorities from more than 30 countries. The main objective of ICPEN is to facilitate and encourage action to prevent and redress deceptive marketing practices with an international component.

The exchange of information which occurred between member authorities of ICPEN played a key role in ACCC's investigations into IT&T AG's activities.