Startel fined $320,000 for misleading customers

Unified communications company Startel has been fined $320,000 for its telemarketing behaviour, which was found to be in breach of Australian consumer law.

The Australian Competition and Consumer Commission (ACCC) ordered Startel to pay penalties for misleading consumers about their rights under Australian Consumer Law (ACL) when cold calling to sell mobile phone plans.

The ruling was overseen by judge Hon Berna Joan Collier in Federal Court.

The ACCC alleged the telecommunications company breached the law by not informing consumers they could get out of the contract within 10 business days. The Truphone subsidiary also failed to supply documents that would help people decide if they wanted to proceed with the contract. Startel also took money from bank accounts during the cooling off period.

“The provisions of the ACL breached by Startel concerned many instances where Startel mislead consumers as to their rights, or failed to advise them of their rights, or acted inconsistently with their rights, or imposed unlawful conditions. I do not consider that the contraventions identified by the ACCC and conceded by Startel were in any way trivial, or mere technical breaches of the ACL," Justice Collier said.

“The relevant provisions of the ACL seek to ensure that consumers negotiating agreements with such dealers in such circumstances are provided with agreements which fully and fairly inform them of their rights to terminate the agreements. In the circumstances of this case the contraventions of the ACL by Startel were serious, numerous, and occurred over a relatively lengthy period of time.”

The court also ruled on a community service order that will require Startel to publish and advertise an web page to inform and educate consumers about their rights when they receive a telemarketing call. This was a first for the ACCC.

The complaint related to an ACCC outreach visit to the remote Indigenous community of Santa Theresa in the Northern Territory. It was later found that over 2500 customers had been affected across the country.

ACCC Commissioner, Sarah Court, said Startel breached a law designed to protect consumers surprised by telemarketing calls and convinced them to enter into a voice contract.

“Traders need to be aware that the ACCC will go far and wide in its work to detect contraventions of the Australian Consumer Law, particularly when these contraventions impact on indigenous consumers.”