The Federal Court in Brisbane has ordered three publishing companies to pay penalties totalling $400,000, and the companies’ director, Mr Andrew Clifford, to pay $100,000 after they admitted that they had engaged in misleading and deceptive conduct, harassment and coercion, and unconscionable conduct in relation to advertising services that were never requested or provided.
The Court imposed penalties of:
- Elite Publishing Group Pty Ltd – $200,000
- Wiltshire Publishers Pty Ltd – $125,000
- Exclusive Media & Publishing Pty Ltd – $75,000
- Andrew Clifford – $100,000
“This outcome confirms the ACCC’s position that the conduct of companies, and their directors, who mislead people into entering agreements they never intended to and then repeatedly demand payment from them can amount to unconscionable conduct and harassment,” ACCC Chairman Rod Sims said today.
“It also sends a strong message that the ACCC will use its powers to take action against companies that make a living out of deceiving small businesses.”
“The ACCC has just released a Business Snapshot on Unconscionable Conduct. The publication contains information about what unconscionable conduct means and tips on how to avoid engaging in the conduct or becoming a victim of it,” said Mr Sims
The Court imposed injunctions by consent on all of the respondents, including a fourth company, Superior Publications Pty Ltd, restraining them from being involved in similar conduct for a period of five years.
An injunction was also imposed by consent on Mr Clifford, restricting his management of corporations for five years. This will prevent Mr Clifford from continuing to be a director of, or managing, these companies.
The publishing companies contacted mostly small businesses by telephone and told them that they had already paid for or agreed to advertising in one of the companies’ magazines, when in fact they had not. The companies would then send them a document and invite them to sign it in order to receive complementary copies of the magazines.
The publishing companies then claimed the signed document was in fact an agreement to buy advertising services, and demanded payment of around $500 for each, when in fact no such agreement was intended.
The companies also admitted they used harassment and coercion and acted unconscionably when pursuing payment from some businesses. This included threatening legal proceedings, or representing that legal action had commenced against a business.
It was also admitted that while the companies represented that 500 copies of certain magazines carrying the businesses’ advertisements would be distributed to various organisations, they never intended to, and never did, distribute 500 copies of the magazines for the purpose of providing advertising services.
The Court also made declarations:
- that the companies breached sections 52, 53, 60 and 51AC of the Trade Practices Act 1974 (now known as the Competition and Consumer Act 2010); and
- that Mr Clifford was knowingly concerned in the breaches,
and ordered that the respondents pay $35,000 toward the ACCC’s costs, by consent of the parties.
The ACCC Business Snapshot on Unconscionable Conduct contains information about what unconscionable conduct means and tips on how to avoid engaging in the conduct or becoming a victim of it.
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