The Federal Court has ordered telecommunications provider Superfone to pay $300,000 in penalties for making false and misleading representations and breaching laws designed to protect consumers from unsolicited telemarketing sales, in proceedings brought by the ACCC.
In June 2020, the Federal Court declared that Superfone had contravened the Australian Consumer Law between June 2017 and December 2018 when cold-calling consumers and signing them up to unsolicited new contracts with Superfone.
More than 1400 consumers, including many elderly people, were contacted by Superfone’s telemarketing agents.
“Superfone’s behaviour was unacceptable. After making unsolicited calls, it misled consumers into entering contracts which the consumers did not want, and did not provide them with information about the ten-day cooling-off period or their rights to terminate the contract,” ACCC Deputy Chair Delia Rickard said.
“When some consumers tried to cancel their contracts, they were charged termination fees.”
The Court found that Superfone’s customer base tended to show that Superfone targeted vulnerable consumers, or at least was only successful in securing unsolicited agreements with vulnerable consumers who were less capable of protecting their consumer rights.
“All businesses must comply with the Australian Consumer Law provisions dealing with unsolicited calls and door to door sales, including the ten-day cooling-off period and termination rights. These laws exist to protect consumers when dealing with cold callers, and give them the opportunity to change their minds about a purchase or agreement they have made as a result,” Ms Rickard said.
“We will continue to take enforcement action against businesses which contravene the unsolicited consumer agreements provisions.”
The Court also ordered Superfone to email consumers who entered into an unsolicited agreement with Superfone, and subsequently paid a termination fee on cancellation of their contract, advising them to contact Superfone for a full refund of the termination fee.
Superfone is also required to email other consumers whose unsolicited agreement have expired but who are continuing to receive services from Superfone on a month-to-month rolling basis, offering them the opportunity to exit their contract with Superfone without charge.
Superfone admitted liability, but contested the penalty amount and other orders.
Notes to editors
More information and details on the consumer protections applicable to unsolicited calls, including cooling off periods, can be found on the ACCC’s website at Telemarketing and door-to-door sales
The Australian Government's national Do Not Call Register allows consumers to list their home, personal mobile or fax number to reduce telemarketing calls.
Background
Superfone is a reseller to consumers of mobile, landline and internet services which use major telecommunication companies’ networks.
On 10 December 2019 the ACCC instituted proceedings in the Federal Court against Superfone after complaints by consumers that Superfone had transferred their services without their informed consent.
In June 2020, the Court declared that Superfone had contravened the Australian Consumer Law by making unsolicited consumer agreements. It also declared that Superfone:
- made false or misleading representations to consumers that they were affiliated with the consumer’s existing provider, that they were calling to offer discounts or savings on the consumers existing plan and that consumers had no right to a cooling-off period or to terminate their contract
- failed to inform consumers about their right to terminate the agreement
- failed to provide consumers with written agreement documentation
- did not comply with the requirement that written agreement include required information, such as information about termination rights, and
- supplied goods or services and/ or required or accepted payment before the cooling off period had expired.