The Federal Court in Melbourne has imposed penalties totalling $2.7 million against two overseas companies, Yellow Page Marketing BV (YPM) and Yellow Publishing Limited (YPL), for sending thousands of Australian businesses misleading faxes and invoices in an attempt to obtain subscriptions to their online business directories.
The ACCC alleged that between May 2010 and November 2010, YPM and YPL misled thousands of businesses into thinking they were dealing with Sensis Pty Ltd Yellow Pages®, a business well known around Australia. The YPM and YPL companies sent faxes and invoices that contained the words 'Yellow Page' and a 'Walking Fingers' logo.
"This is a significant outcome and represents the highest penalty to be handed down since civil pecuniary penalties were introduced as part of the Australian Consumer Law," Australian Competition and Consumer Commission chairman Graeme Samuel said.
"These proceedings are a warning to companies both here and overseas that the ACCC will not tolerate this type of conduct and will seek substantial penalties," Mr Samuel said.
In her reasons for judgement, Justice Gordon noted that the traders involved in this directory scam had hectored businesses, demanding payment of invoices and threatening the imposition of late fees.
It is important that businesses affected by this scam understand that the court's orders (described below) mean that they can now ignore any demand for payment and stop making payments to these companies.
While making orders as to refunds the court did note the real possibility that the parties may not comply. This is because the case reveals this directory to be a scam run by overseas entities, and it is therefore unlikely that any real assets can be tracked down.
The court declared that YPM and YPL had contravened sections 52 and 53 of the Trade Practices Act 1974* as neither of the companies are in any way affiliated with Sensis Pty Ltd Yellow Pages®.
The court's final orders also included:
- injunctions restraining YPM and YPL from registering domain names including the words "yellow page/s" in combination with ".au" or the name of a city, state or other location in Australia
- all Australian online directory contracts with YPM and YPL were declared void, with no further amounts payable, unless specifically requested by a business to remain in force
- cheques subpoenaed from the Commissioner of Police of Western Australia to be delivered to the ACCC. The ACCC will return those cheques to the relevant businesses, and
- YPM and YPL to pay the ACCC's costs.
On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.