Court says telcos' conduct 'unconscionable'

By:
Alan Burkitt-Gray
Published on:

Australian federal court condemns 'unconscionable conduct' by telecoms operators SoleNet and Sure Telecom

Australia’s Federal Court has condemned local operators SoleNet and Sure Telecom – both owned by the same company – for what it calls “unconscionable conduct”. Sure Telecom, of Baulkham Hills, New South Wales, is not related to the Batelco subsidiaries in Guernsey, Jersey and other places.

The court says that the businesses, owned by the Harrison Companies, swapped customers from one to another “without their knowledge or informed consent, and were then subject to unjustified demands for payment of early termination or cancellation fees”.

The court will decide on penalties by 10 February 2017, after consulting with those affected.

The court also found the sole director of the Harrison Companies, James Lee Harrison, was involved in the unconscionable conduct. In making this finding, Justice Mark Moshinsky stated: “I do not think there is any doubt that Mr Harrison was well aware of each of the elements of the system of conduct or pattern of behaviour… He was aware that the transfers involved, at best, a lack of transparency or, at worst, trickery or deception, vis-à-vis customers.”

The court found that the companies were restructured between 2013 and 2015 “in part to avoid regulatory sanctions and unpaid debts to regulators”.

The Australian Consumer and Competition Commission (ACCC) welcomed the move. “This outcome sends a clear message to companies and directors that they cannot avoid their obligations under the Australian consumer law by corporate restructures which involve transferring customers without their consent,” said chairman Rod Sims.

Harrison’s businesses have incurred the wrath of regulators before. A year ago the Australian Communications and Media Authority (ACMA) found that SoleNet – which had changed its name to Comms Service Ops had breached the country’s telecoms consumer protection code on 24 occasions – by misrepresenting the nature of its calls to consumers; making misleading and inaccurate assertions; and omitting key information.

The sole director “was also the sole director of Sure Telecom, which itself clocked up multiple breaches of the code in 2014”, said Chris Chapman, chair of ACMA, in December 2015.