Consumers will get refunds from DirectLink Communications Pty Ltd, a telecommunications marketer, after Australian Competition and Consumer Commission action.
DirectLink marketed long distance telecommunications services to home and business users, ACCC Chairman, Professor Allan Fels, said today. In its promotion, DirectLink offered to pay bonuses to consumers if, after joining the scheme, they recruited new participants.
The ACCC concluded that these recruitment bonuses breached the prohibitions against referral selling and pyramid selling in the Trade Practices Act.
The Act prohibits schemes where participants are paid merely for recruiting new participants. Consumers entering these schemes are often made promises of future income based on recruitments but new recruitment is usually limited and the potential for consumer detriment is significant.
The ACCC is concerned that other players in the telecommunications industry may be considering similar schemes.
To protect consumers, the ACCC will continue to take swift action against such promoters and other industry players failing to meet consumer-protection provisions of the Act.
DirectLink marketed long distance telecommunications services to home and business users, ACCC Chairman, Professor Allan Fels, said today. In its promotion, DirectLink offered to pay bonuses to consumers if, after joining the scheme, they recruited new participants.
The ACCC concluded that these recruitment bonuses breached the prohibitions against referral selling and pyramid selling in the Trade Practices Act.
The Act prohibits schemes where participants are paid merely for recruiting new participants. Consumers entering these schemes are often made promises of future income based on recruitments but new recruitment is usually limited and the potential for consumer detriment is significant.
The ACCC is concerned that other players in the telecommunications industry may be considering similar schemes.
To protect consumers, the ACCC will continue to take swift action against such promoters and other industry players failing to meet consumer-protection provisions of the Act.