ISP's Accused of Dodgy Deals

Written by Oonagh Reidy     22/04/2013 | 11:24 | Category: HOME OFFICE

ISP's get a hammering for dodgy contracts.

ISP's Accused of Dodgy Deals

ACCC accuses ISP of forcing unagreed prices onto customer services, and not allowing them to leave contracts. 

The Australian Competition and Consumer Commission is alleging that a number of terms in ByteCard Limited trading as Netspeed Internet Communications, standard consumer contracts are "unfair" and "should be declared void." 

The unfair contract terms include changing the prices of contracted services and is taking the ISP to the Federal Court.

The alleged unfair contract terms allowed the ISP to vary the price of a contract  - without notice.

This, in effect, meant Netspeed customers were forced to pay for broadband at prices not agreed to. But the ISP also had the right to terminate customers' Internet service contracts at any time with or without reason, under contract T&C's.

The ISP whose Internet services include TransACT (in Canberra) Longreach super fast broadband, BlackSIm mobile, telephony, web hosting, did not comment on the case, when contacted by SmartHouse.

But this is not the first time Bytecard has been in hot water with the law.

In February last, it was fined $75,000 by the Federal Court  for failing to refund customers monies or waive debts and its Director Brian Morris, was fined another $37,000.  

The ACCC alleges that these clauses in ByteCard's standard terms and conditions are unfair and contravene Australian Consumer Law, and are not necessary to protect its business interests.

The matter has been filed in the Federal Court's Fast Track List and listed for a conference in Melbourne on 13 June.

"Outrageous"

Another mobile provider Excite Mobile also got a hammering by the ACCC this week - after being found to have created a phantom mobile service, fictitious complaints handling body and even created a fake debt collector (called Jerry Hastings) to threaten the customer to pay (alleged) debts.

Excite Mobile told customers mobile phone coverage was available in their area when it was not, including those in remote indigenous communities where no coverage was available.

Other dodgy dealing included enforcing a "day cap", which in some cases allowed a customer to make a two minute call per day before being charged fees in excess of the monthly contract charge, and charging $195 to customers returning a damaged phone, even if it was only the box that was damaged.

Justice Mansfield of the Federal Court considered the sales contract created by Excite Mobile was "clearly unfair" and "to such a degree as to attract a strong adverse moral judgment".

Justice Mansfield also considered the marketing approach of Excite Mobile to be "cynically indifferent to the interests of its potential customers, and was unconscionable".

"This is a landmark decision on unconscionable conduct," ACCC chairman Rod Sims said.

"The conduct of Excite Mobile was outrageous. Inventing a fictitious complaints handling body to deceive customers and creating a fictitious debt collector to coerce the customer to pay an alleged debt to Excite Mobile is unjustifiable and unacceptable." .

Excite Mobile's directors, Mr Obie Brown and Mr David Samuel were both found to have been directly knowingly concerned in Excite Mobile's contraventions.

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