The Federal Court has ordered the corporations trading as SoleNet and Sure Telecom (the SoleNet/Sure Telecom Companies) and Mr James Harrison pay penalties totaling $250,000 and be restrained from carrying on a business or supplying services in connection with telecommunications for a period of two years.
The Court also disqualified Mr Harrison from managing corporations for three years. The orders take effect 1 April 2017.
“The disqualification of Mr Harrison as a director sends a clear message that directors have responsibility to ensure their businesses comply with the Australian Consumer Law,” ACCC Deputy Chair Delia Rickard said.
In delivering his judgment, Justice Moshinsky noted “the contravening conduct was serious, deliberate and extended over a period of about two to three years” and “was not ad hoc, but systemic and planned”. His Honour also noted “Mr Harrison, the sole director of the companies, was ‘hands on’ in managing their day-to-day operations and was intimately involved in their conduct”.
In delivering his judgment on relief, His Honour also made orders that the SoleNet/Sure Telecom Companies and Mr Harrison:
- take all reasonable steps to make refunds within 60 days to customers whose contracts were transferred or purportedly transferred from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent and had paid early termination or cancellation fees; and
- pay the ACCC’s costs.
The ACCC acknowledges the assistance of the Telecommunications Industry Ombudsman (TIO) and the Australian Communications and Media Authority (ACMA) in its investigation.
Background
The SoleNet/Sure Telecom Companies provide telecommunications services to residential and small businesses customers.
In December 2016, the Court found the SoleNet/Sure Telecom Companies had engaged in unconscionable conduct in connection with the supply of telecommunications services. The Court also found:
- the sole director of the SoleNet/Sure Telecom Companies, Mr Harrison, was involved in the unconscionable conduct; and
- in the cases of four of the six customers who gave evidence in the proceeding, the SoleNet/Sure Telecom Companies engaged in undue harassment in connection with the supply of services and payment for services.
The Court found that, between 2013 and 2015, the SoleNet/Sure Telecom Companies were restructured in part to avoid regulatory sanctions and unpaid debts to regulators.
As part of this process, customers were transferred from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent, and were then subject to unjustified demands for payment of early termination or cancellation fees, when there was no legitimate contractual basis for the SoleNet/Sure Telecom Company that was seeking the payment to demand payment.