Court orders Telstra to refund ex-One.Tel customers misled into signing mobile phone contracts
Around 3,000 former One.Tel mobile phone customers will receive refunds from Telstra after the Australian Competition and Consumer Commission today obtained orders and injunctions in the Federal Court, Melbourne.
"Refunds to affected consumers are part of a wider settlement of our court action against Telstra following the collapse of One.Tel", ACCC Chairman, Professor Allan Fels, said today. "Telstra has accepted in the Federal Court that it misled and deceived many consumers when trying to win over previous One.Tel NextGen mobile phone customers.
"Despite its protestations at the ACCC taking swift court action in July, Telstra has now conceded that it told ex-One.Tel customers they would be subject to early termination fees if they went to a phone company other than Telstra and they had no choice but to switch to Telstra when this was not true. In fact, consumers had a choice of taking their business to a number of mobile phone service providers without penalty.
"Indeed, Telstra had instructed its call centre staff to provide this misleading information when calling ex-One.Tel customers and also when receiving inquiry calls from these customers, many of whom received text messages on their mobile phones asking them to contact Telstra.
"The court today made declarations that Telstra had engaged in conduct that was misleading or deceptive or likely to misled or deceive in contravention of sections 52 and 53 of the Trade Practices Act 1974.
"It appears to have been a case of a service provider taking advantage of the confusion surrounding the demise of a competitor. Clearly we are concerned if a company has obtained customers via misinformation, especially vulnerable and confused customers of the collapsed One.Tel", he said.
Telstra has now agreed to reimburse between $20 and $30 in mobile phone access charges to around 3,000 former One.Tel Next Generation customers who signed up with Telstra for mobile phone services believing that they had no choice but to sign with Telstra or pay One.Tel early termination fees, and who later contacted Telstra about being misled.
The initial action was brought against Telstra in early July 2001 following One.Tel being placed into administration. At that time, the ACCC alleged that Telstra engaged in unlawful, misleading and deceptive conduct when dealing with former One.Tel Next Generation mobile phone customers. Specifically, the ACCC alleged that Telstra call centre staff advised consumers 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 might seek early termination fees. Subsequently, on 6 July 2001 the Federal Court ordered an urgent interim injunction restraining Telstra from making further misleading statements.
In agreeing to resolve the proceedings Telstra consented to the following court orders:
declarations by the court that Telstra engaged in misleading or deceptive conduct in contravention of sections 52 and 53 of the Trade Practices Act 1974:
by representing from about 22 June to 6 July 2001 to One.Tel Next Generation customers that if they transferred to a mobile telephone service provider other than Telstra after 9 June 2001, or did not transfer to Telstra, they would be, would be likely to be, may be or could be, liable to One.Tel for early termination fees - whereas in fact they did not have to pay such fees; and
by representing from about 9 June to 6 July 2001 to One.Tel Next Generation customers that they had no choice but to switch to Telstra and that Telstra had acquired or taken over the contracts of One.Tel Next generation customers – whereas in fact such One.Tel customers did have a choice other than switching to Telstra and Telstra had not acquired or taken over the One.Tel contracts.
injunctions, (affirming the urgent interim injunctions ordered in July 2001), restraining Telstra from representing that:
One.Tel Next Generation customers had no choice but to switch to Telstra; and
Telstra had acquired or taken over the contracts of One.Tel Next Generation customers.
an order requiring Telstra to develop and implement for a period of two years a compliance program for Part V of the Trade Practices Act 1974 for all staff of the retail mobile telephone business of Telstra.
an order requiring Telstra to pay on or before 31 January 2002:
$20 to One.Tel Next Generation customers who switched to Telstra as their mobile telephone service provider on or after 9 June 2001 but cancelled their contract with Telstra before 10 August 2001 or otherwise ceased to be a Telstra mobile telephone customer; and
$30 to One.Tel Next Generation customers who switched to Telstra as their mobile telephone service provider on or after 9 June 2001 and who accepted the offer in Telstra's letter of 24/28 August 2001 and ceased to be a Telstra mobile telephone customer.
