Superfone is the latest company to be hit with penalties by the Federal Court. The telco reseller has been handed $300,000 in fines for cold-calling customers and locking them into unsolicited new contracts.
What happened with Superfone?
Superfone is a reseller of mobile, internet and landline services for major telcos across Australia.
The Australian Competition & Consumer Commission (ACCC) began proceedings against Superfone back in December, 2020.
The consumer watchdog claimed that between June 2017 and December 2018, telemarketers on behalf of the telco cold-called customers to offer discounted plans on their existing network if they signed up for a new contract via Superfone.
According to a press release from the ACCC, vulnerable customers such as elderly Australians, were were particularly susceptible.
“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,” the press release read.
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Back in 2019 the ACCC stated that Superfone breached Australian consumer law by “making consumers think its offers and services were endorsed by or affiliated with their existing telco provider when this was not the case.”
“We also allege Superfone breached the Australian Consumer Law’s unsolicited consumer agreement provisions, which were put in place to protect consumers from these sorts of high-pressure telemarketing calls, and from signing up to contracts they may not understand.”
According to the ACCC, the telemarketers also didn’t provide customers with information regarding a ten day cooling off period (which they are entitled to by law) if they changed their minds. They are also said to have accepted payment before that cooling off period was over.
The ACCC also said that Superfone failed to give consumers written agreement documentation
“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 this week.
“When some consumers tried to cancel their contracts, they were charged termination fees.”
The Federal Court agrees
The Federal Court of Australia has found the ACCC’s allegations to be true and has now fined the reseller $300,000.
Superfone will also be required to email customers who entered into these agreements and had to pay a termination or cancellation fee. These customers are to be advised they are entitled to a refund.
Furthermore, customers who entered into one of these agreements who are still receiving these services and are now on a month-to-month rolling basis must be offered the opportunity to exit the contract without penalty.
While Superfone has accepted the charges levelled against it, the company is said to be contesting the penalty amount as well as other unnamed Federal Court orders.
“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,” Rickard said.
“We will continue to take enforcement action against businesses which contravene the unsolicited consumer agreements provisions.”