The Federal Court has ordered SoleNet and Sure Telecom, along with director James Harrison, pay penalties totaling $250,000 and “be restrained from carrying on a business or supplying services in connection with telecommunications” for a period of two years.
The Court also disqualified Harrison from managing corporations for three years.
The residential and small business telco was found in December 2016 to be “engaging in unconscionable conduct” including “undue harassment” of customers.
Between 2013 and 2015, the SoleNet/Sure Telecom Companies were restructured – in part to avoid regulatory sanctions and unpaid debts to regulators. As part of this process, customers were transferred from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent, and were then subject to unjustified demands for payment of early termination or cancellation fees, when there was no legitimate contractual basis for the SoleNet/Sure Telecom Company that was seeking the payment to demand payment.
“The disqualification of Mr Harrison as a director sends a clear message that directors have responsibility to ensure their businesses comply with the Australian Consumer Law,” ACCC Deputy Chair Delia Rickard said.
In delivering his judgment, Justice Moshinsky noted “the contravening conduct was serious, deliberate and extended over a period of about two to three years” and “was not ad hoc, but systemic and planned”. Justice Moshinsky also noted “Mr Harrison, the sole director of the companies, was ‘hands on’ in managing their day-to-day operations and was intimately involved in their conduct”.
In delivering his judgment on relief, Justice Moshinsky also made orders that the SoleNet/Sure Telecom Companies and Harrison take all reasonable steps to make refunds within 60 days to customers whose contracts were transferred (or purportedly transferred) from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent, and had paid early termination or cancellation fees.
SoleNet/Sure Telecom Companies and Harrison also have to pay the ACCC’s costs.
The ACCC said the Telecommunications Industry Ombudsman (TIO) and the Australian Communications and Media Authority (ACMA) assisted in this investigation.