Telecommunications provider Gotalk Ltd will offer to compensate consumers who suffered a loss as a result of certain telemarketing practices.

The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Gotalk concerning the conduct of its overseas telemarketing agents. 

"Australian businesses using outsourced telemarketers must control what the agents are doing," ACCC Chairman, Mr Graeme Samuel, said. "Ultimately, if the telemarketers breach the law, the business will be held responsible."

The ACCC investigated complaints from consumers who had been contacted by Gotalk telemarketers between 2004 and 2007. A number of complaints alleged the telemarketers had incorrectly represented:

  • they were calling on behalf of the consumer's current carrier
  • Gotalk was an owner, subsidiary, agent or reseller of the consumer's current carrier
  • the consumer was required to change their carrier to Gotalk
  • the price and/or effect of the terms and conditions of Gotalk services, and
  • changing to Gotalk would not compromise any benefit they currently enjoyed for bundling multiple services with one carrier.

Complaints also suggested Gotalk's telemarketers contacted some consumers with great frequency, despite those consumers making it clear that they did not wish to be contacted, and continued to contact them until they transferred to Gotalk. 

Following investigations, the ACCC formed the view that Gotalk telemarketers had breached the fair trading provisions of the Trade Practices Act 1974 prohibiting false or misleading representations and harassment or coercion*.

Gotalk accepted that, given the large number of consistent consumer complaints, it was likely that its telemarketers engaged in the alleged conduct and admitted that, if proven, the conduct would breach the fair trading provisions of the Act.

As part of the undertaking, Gotalk will write to all current customers obtained via telemarketing and place newspaper advertisements to reach current and former customers. Those customers can then contact Gotalk on 1800 468 255 to request an investigation of their circumstances.

To address the ACCC's concerns Gotalk has also undertaken to implement a comprehensive trade practices compliance program. The program includes obligations to record both successful and unsuccessful telemarketing calls and to monitor a significant number of randomly selected conversations to ensure they comply with the Act. 

Mr Samuel said companies cannot escape their responsibilities by relying on agents to handle compliance.

"Companies must police outsourced telemarketers as they would their own employees, especially if the telemarketers are located overseas. Complaints indicate telemarketers can engage in all sorts of unacceptable conduct if they are not kept under control."

Mr Samuel said the principles in the Telecommunications Industry Ombudsman's (TIO) Position Statement** on record-keeping by telecommunications telemarketers should apply to all telemarketers.

"The companies hiring telemarketers are best placed to insist that adequate records are maintained. Complete recordings of all calls resulting in sales should be kept so any complaints can be fully investigated."

The ACCC acknowledges the assistance it has received from complainants in identifying the scale of this conduct, and from other agencies including the state offices of fair trading, the Australian Communications and Media Authority and the TIO in presenting a coordinated response to the issue.

Gotalk's undertaking, including the letter to its customers, the compliance program and the corrective advertisement, will be available on the undertakings register of the ACCC website.