People Telecom Pty Limited has admitted its sales agents transferred customers from rival carriers without consent and made other potentially misleading claims in order to signup customers.
As part of a court enforceable undertaking People Telecom will now offer affected consumers refunds and waive debts arising from telemarketing and door-to-door sales on its behalf.
Australian Competition and Consumer Commission chairman Graeme Samuel said this matter again highlights the importance of companies monitoring what their sales agents are doing.
"The ACCC will continue to hold companies responsible for what is said or done by their authorised representatives."
For several years People Telecom has used telemarketers and door-to-door sales agents to promote its telecommunication services, which include mobile, fixed phone and data services.
Complaints to the ACCC suggest agents transferred a number of prospective customers' services to People Telecom without their consent, or after representing that:
- the agents were working on behalf of the customer's current telecommunications carrier
- People Telecom was an agent or subsidiary of the customer's current carrier or resold that carrier's services
- the customer was required to change their carrier to People Telecom, or
- changing to People Telecom would not compromise any current contractual or billing arrangements with their current carrier
when this was not the case.
Some customers affected by this conduct disputed the obligation to pay invoices from People Telecom, and those invoices were referred to debt collectors as part of People Telecom's credit management process.
In response to concerns that People Telecom may have breached the Trade Practices Act, it has offered the ACCC a court enforceable undertaking that it will:
- not make misrepresentations of the kinds listed above
- write to affected customers, and place a notice on its website, offering to allow them to terminate their contract without penalty, and refund or waive certain debts arising from the misrepresentations
- monitor the conduct of its agents and ensure they comply with the scripts provided by People Telecom, and
- implement a trade practices compliance program, including a complaints handling system that will be integrated with the credit management process.
"In dealing with consumer complaints, companies should act quickly to identify any trends or problems areas and take action to avoid recurrence," Mr Samuel said.
"Companies should also be sure that debt collection is not pursued where there are real questions over the legality of the contract that led to those debts."