'No Nonsense' agreement mislead mobile phone consumers: ACCC

A promotion by mobile telephone dealer Mobile Innovations Pty Limited had misled consumers, the Australian Competition and Consumer Commission has found.

'The ACCC received a small number of complaints from consumers who had signed up with Mobile Innovations in response to a promotion it ran during May 1996', ACCC Chairman, Professor Allan Fels, said today. 'The promotion featured a a 'no-nonsense 15 month agreement' which failed to mention that the agreement would only lapse if the customer gave three months' notice of their intention to quit.

'After the 15 months, in late 1997, some consumers wanted to examine alternative airtime deals, but as they had not given notice, Mobile Innovations took the three months' notice to start from the end of the fifteenth month, and charged them for the three extra months. These consumers were tied into the agreement for a total period of up to 18 months. 'ACCC inquiries indicated that Mobile Innovations telephone marketing staff also failed to inform potential customers of the notice requirement.

'The ACCC was preparing to take this matter to court earlier this year. It only decided not to when Mobile Innovations conceded that its promotion may have had the potential to mislead some consumers and dropped the policy requiring their customers to give notice of termination. 'Mobile Innovations has also given the ACCC court-enforceable undertakings that it will: make refunds to affected consumers; retrain its telemarketing staff; anonymously audit those telemarketing staff; review its trade practices compliance program and have it independently audited; and conduct pre-launch testing of all new mobile phone promotional material.

'The mobile phone industry continues to generate a disproportionate amount of work for ACCC staff. If the industry doesn't have a long hard look at itself, some companies are likely to find themselves in court,':Professor Fels warned.