ACCC institutes against Telstra for misleading One.Tel customers

The Australian Competition and Consumer Commission instituted proceedings in the Federal Court in Melbourne today alleging that Telstra engaged in unlawful misleading and deceptive conduct when dealing with former One.Tel mobile phone customers.

The court action concerns statements allegedly made by Telstra call centre representatives to consumers about early termination fees payable by One.Tel Next Generation customers.

"The ACCC is alleging that consumers were advised by Telstra representatives, as late as yesterday, that if they transferred their mobile phone service to any mobile phone service provider other than Telstra, or did not transfer to Telstra before a certain date, the One.Tel administrators may seek termination fees", ACCC Chairman, Professor Allan Fels, said today.

"In fact, the One.Tel Administrators turned off the Next Generation mobile phone network on 9 June 2001. It is the view of the ACCC that no contract termination fees can apply to customers who transfer to any other service provider after One.Tel withdrew its service. Clearly the customer must not incur a penalty when it is the business that stopped providing its services", he said.

The ACCC alleges that Telstra representatives continued to advise customers of the termination fee in circumstances where none could, or would, be levied.

"In the break up of One.Tel's assets, the ACCC is charged with ensuring that the consumer protection provisions in the Trade Practices Act prohibiting misleading and deceptive conduct are strongly enforced", Professor Fels said.

"This appears to be a case of a service provider taking advantage of the confusion surrounding the demise of a competitor. Clearly we are concerned if a service provider has obtained customers via misinformation, especially vulnerable and confused previous customers of One.Tel", he said.

The ACCC is seeking:

• Declarations that Telstra and its representatives engaged in conduct that was misleading or deceptive, or likely to mislead or deceive in contravention of sections 52(1), 53(c), 53(f), and 53(g) of the Trade Practices Act 1974
• An injunction restraining Telstra and its representatives from making misleading representations of a similar kind in the future
• Orders directing Telstra to allow consumers that were misled 14 days to rescind their contract with Telstra without penalty, and that Telstra repay any payments made by these customers and/or forfeit any amounts owing to it since 9 June 2001
• Orders directing Telstra to place corrective advertisements in major metropolitan newspapers and write to affected consumers
• An order directing Telstra to implement a trade practices compliance program

A hearing has been set for 2:15pm on Friday 6 July before Justice Heerey in the Federal Court, Melbourne.