The Australian Competition and Consumer Commission has obtained ex parte injunctions against a US-based multi-level marketing phonecard company Destiny Telecomm* and a number of Australian representatives. In the Federal Court, Sydney yesterday Justice Lehane ordered:
the parties be restrained from promoting, advertising, holding out or participating in the scheme or any similar scheme known as Destiny Telecomm International's Binary Marketing Program; and disposing, transferring, dispersing, removing from the jurisdiction possession of money or other consideration received from person for the purpose of taking part in the scheme.
"The ACCC moved to gain the orders because it had received more than 100 inquiries in the past two weeks from consumers concerned about the scheme, and has been informed that more than 14,000 consumers have been signed," ACCC Chairman, Professor Allan Fels, said today.
"The scheme involves consumers purchasing a phonecard for $100 for international, STD and/or mobile telephone use. If those consumers introduce further customers to the scheme, they receive a commission. The amount of commission increases according to the number of customers introduced.
"The ACCC approached the company seeking clarification of the scheme to determine if it breached the Trade Practices Act. The scheme is due to begin tomorrow (March 1) and the ACCC was concerned that Destiny Telecomm not start up until the ACCC had had an opportunity to fully review the scheme. "The company did not respond, leaving the ACCC with little choice but to take action.
"The ACCC was concerned that consumers are providing credit card details and debit authority to an overseas company whose activities may have breached the Act. "The ACCC has been monitoring the development of international marketing. Consumers are using the increased opportunities provided by global marketing, particularly the Internet, to obtain a wider range of goods at more competitive prices.
"The ACCC does not want to see this exciting development undermined by schemes which on closer analysis breach the Act, particularly as there are currently few protocols to protect consumers in this area. "Today's action is a convergence of two of the ACCC's areas of high priority - telecommunications and the global marketplace."
"The ACCC has been assisted in its inquiries by the US Federal Trade Commission, the Canadian Bureau of Competition Policy and the Department of Justice in North Carolina, which has already taken action against similar schemes promoted by Destiny Telecomm." The ACCC suggests that consumers who may be concerned about providing their credit card details to representatives of the scheme should revoke their authorisation by contacting their relevant bank.
*Destiny Telecomm is in no way associated with Australia's Telstra.
the parties be restrained from promoting, advertising, holding out or participating in the scheme or any similar scheme known as Destiny Telecomm International's Binary Marketing Program; and disposing, transferring, dispersing, removing from the jurisdiction possession of money or other consideration received from person for the purpose of taking part in the scheme.
"The ACCC moved to gain the orders because it had received more than 100 inquiries in the past two weeks from consumers concerned about the scheme, and has been informed that more than 14,000 consumers have been signed," ACCC Chairman, Professor Allan Fels, said today.
"The scheme involves consumers purchasing a phonecard for $100 for international, STD and/or mobile telephone use. If those consumers introduce further customers to the scheme, they receive a commission. The amount of commission increases according to the number of customers introduced.
"The ACCC approached the company seeking clarification of the scheme to determine if it breached the Trade Practices Act. The scheme is due to begin tomorrow (March 1) and the ACCC was concerned that Destiny Telecomm not start up until the ACCC had had an opportunity to fully review the scheme. "The company did not respond, leaving the ACCC with little choice but to take action.
"The ACCC was concerned that consumers are providing credit card details and debit authority to an overseas company whose activities may have breached the Act. "The ACCC has been monitoring the development of international marketing. Consumers are using the increased opportunities provided by global marketing, particularly the Internet, to obtain a wider range of goods at more competitive prices.
"The ACCC does not want to see this exciting development undermined by schemes which on closer analysis breach the Act, particularly as there are currently few protocols to protect consumers in this area. "Today's action is a convergence of two of the ACCC's areas of high priority - telecommunications and the global marketplace."
"The ACCC has been assisted in its inquiries by the US Federal Trade Commission, the Canadian Bureau of Competition Policy and the Department of Justice in North Carolina, which has already taken action against similar schemes promoted by Destiny Telecomm." The ACCC suggests that consumers who may be concerned about providing their credit card details to representatives of the scheme should revoke their authorisation by contacting their relevant bank.
*Destiny Telecomm is in no way associated with Australia's Telstra.