People Telecom Limited - s.87B undertaking

People Telecom supplies telecommunication services, including mobile, fixed phone and data services, to Australian businesses and consumers.

For the past several years it has used telemarketers and door-to-door sales agents to promote its products.  It appears that these agents transferred some 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.

As a result of this conduct, the ACCC believes that People Telecom engaged in conduct that was misleading or deceptive or likely to mislead or deceive, and made representations that it has affiliation it does not have, and that this conduct was likely to have contravened sections 52 and 53(d) of the Trade Practices Act 1974.  People Telecom acknowledges that by virtue of section 84 of the Act the conduct engaged in on behalf of People Telecom by its agents shall be deemed to have been engaged in by People Telecom.

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.