ACCC takes action against Excite Mobile Pty Ltd
The Australian Competition and Consumer Commission has instituted proceedings against Excite Mobile Pty Ltd, alleging false and misleading conduct and unconscionable conduct in providing mobile phone services across Australia. Excite Mobile is also alleged to have used undue coercion in attempts to obtain payment for mobile phone services.
The ACCC alleges that:
- Excite Mobile acted unconscionably in relation to the sales method it used to induce customers to enter into a 24 month mobile phone contact, the terms included in its mobile phone contracts and in Excite Mobile’s reliance upon, and enforcement of, those contractual terms
- Excite Mobile falsely represented to customers that mobile phone coverage was available at their home address when it was not, including to indigenous customers in remote communities where no coverage was available.
- Excite Mobile created a fictional complaints handling organisation called “Telecommunications Industry Complaints” which deceived consumers into believing that complaints about Excite Mobile were being handled by an independent organisation.
- Excite Mobile sent letters to at least 1074 customers representing to customers that the letters were from independent debt collector Jerry Hastings or a representative, and that the debt alleged to be owed to Excite Mobile had been referred for collection.
- The ACCC will allege this representation was false, that there was no such independent debt collector and the letters were sent by Excite Mobile.
- The Jerry Hastings debt collection letters included a telephone number for customers to call which was answered by representatives of Excite Mobile that claimed to be from Jerry Hastings’ office. These representatives then induced or attempted to induce customers to pay the debt allegedly owed to Excite Mobile.
- By sending the 1074 debt collection letters in the name of Jerry Hastings and using the Jerry Hastings telephone number, Excite Mobile used undue coercion against consumers in relation to obtaining payment for mobile phone services and that such conduct is unconscionable.
- A number of these letters made false representations about the rights and remedies available to Excite Mobile in the event that legal proceedings were instituted against the customer.
- The ACCC will allege that these false representations included that to recover the alleged debt a court would make orders:
- requiring the customer to pay an additional charge equal to 20% of the customer’s alleged debt for failing to pay on time
- for the repossession of all assets of value owned by the customer including children’s toys.
The ACCC is seeking declarations that Excite Mobile contravened the Trade Practices Act 1974 and that its directors Mr Brown and Mr Samuel and its employee/agent Ms Smart were knowingly concerned and is seeking:
- Pecuniary penalties
- Orders that Mr Brown and Mr Samuel be disqualified from managing a corporation for a period of five years
- An order for findings of fact pursuant to section 83 of the Trade practices Act 1974; and
A directions hearing has been scheduled before Justice Mansfield at 9am on Friday 13 January 2012 in the Federal Court in Adelaide.