The Australian Competition and Consumer Commission has secured $60,000 in refunds for 3,000 consumers, mostly unemployed rural youth, who used a 1900 premium rate phone service that promised job seekers guaranteed employment and discounts on removal and accommodation costs.
The ACCC responded to advertisements placed by inthebigcity.com Pty Ltd that appeared in rural and regional newspapers throughout Queensland and northern New South Wales.
The ACCC alleged that the representations in the advertisement breached the false and misleading provisions of the Trade Practices Act 1974.
"There were no guarantees of employment or discounts available, and the recorded information provided by inthebigcity.com Pty Ltd at a cost of $2.48 per minute was inaccurate, dated or totally false", Acting ACCC Chairman, Mr Rod Shogren, said today. "In particular, consumers were not informed that available positions were commission only".
After an extensive investigation, the ACCC found that most young people using the 1900 number were unemployed and thus least able to afford the cost of a premium rate telephone call. Most lived in rural and regional Queensland and northern NSW. They were desperate to find work and were willing to move away from home to secure a job.
One consumer, a pensioner from North Queensland, was shocked to receive a telephone bill with almost $200 being credited to the 1900 number during a billing period. His unemployed daughter telephoned inthebigcity.com Pty Ltd in a bid to find employment. Their phone was disconnected due to the excessive bill accumulated because of the 1900 number. It remained disconnected for more than six months due to their inability to pay the reconnection fee. After an ACCC approach, Telstra waived the fee and reconnected this consumer.
In another instance an unemployed teenager from rural NSW responded to an advertisement in a local newspaper that guaranteed employment in Brisbane. Due to the lack of her jobs in her local community, she was prepared to move away from home to secure employment. Despite spending over $100 on phone calls, she failed to find a job. Her mother, a pensioner supporting three children, had severe financial difficulties after receiving the bill. The ACCC has been able to secure a refund for this household.
Numerous other consumers complained of having spent over $80 on this service without securing employment. These consumers were angry at the time taken to access the information on the 1900 service, the inability to skip forward and back through the recorded message, the limited range of jobs available and the inaccuracy of the information provided.
"This type of scheme preys on a vulnerable section within the community", Acting ACCC Chairman, Mr Rod Shogren, said today. "Regional or rural people who are unemployed, studying or in financial need are at great risk from schemes that incorrectly offer guaranteed employment.
"Businesses that charge for information need to ensure that the information they provide is accurate.
"Publishers are warned that they must take responsibility for the advertisements they run in their publications, especially when the publisher receives a percentage of the profits from a 1900 service".
The ACCC closed the phone line down in April, and has since obtained consent injunctions and accepted Court-enforceable undertakings from inthebigcity.com Pty Ltd and its Directors, and from APN Newspapers Pty Ltd and its Group Product Development Manager. The undertakings provide for the payment of refunds to consumers for the cost of their calls, corrective newspaper advertisements, and the implementation of a trade practices compliance programs to ensure that future conduct is not at risk of contravening the Trade Practices Act.
The ACCC received cooperation from the Directors of inthebigcity.com Pty Ltd in resolving this matter. Furthermore, APN Newspapers Pty Ltd provided the majority of refunds for consumers. The ACCC obtained information from Telstra in order to provide refunds to consumers and is continuing this negotiation process to further assist in the provision of refunds. Other telephone carriers contacted by the ACCC have agreed to facilitate the payments of refunds to their customers.
Refunds are in the process of being provided to consumers by direct credit to telephone accounts and by cheque.
Consumers who telephoned 1900 999 208 and 1900 999 094 between June 2000 and April 2001 have not received a refund can contact the ACCC on 1300 302 502.