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Indian Telemarketers Misled Consumers |
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Written by Adam Gosling
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Wednesday, 13 February 2008 |
A mobile phone subscriber living in remote Australia was told to
stand on the roof to make phone calls when he found out his new mobile
phone didn't work.Unfortunately he'd have to travel more than 200 kilometres before he would have any hope of getting a signal.
He wasn't the only one. EDirect, which resellers SingTel Optus
mobile services, has now been ordered to issue refunds to more than 150
customers after India-based telemarketers sold them phone contracts
under false pretences.
Telemarketers for EDirect, trading as VIPtel Mobile, were signing up
mobile phone subscribers even though they didn't live in areas where
they could get network coverage and now the company has been found
guilty in a Federal Court of multiple breaches of theTrade Practices Act 1974.
According to a statement by the Australian Competition and Consumer
Commission which took action against VIPtel, the misled customers were
talked into signing 24 month contracts . The trouble was, many lived in
remote indigenous communities in the Northern
Territory where there was no phone coverage. As a result of the action
taken by the ACCC, which acted after complaints from the swindled
subscribers, more than 150 of them will
get refunds and will be able to cancel contracts without.
Whilst many
of the affected consumers were indigenous, non-indigenous consumers
across Australia were also targeted.
Apparently, VIPtel telemarketers were promising potential customers
things like calls to any mobile or landline would be charged at the
cost of a local call. They also told some they would pay no more than a
capped monthly fee; that the mobile phones could be used to send
pictures and access the internet without additional charges; that they
would be able to terminate the plan at any time at no additional
charge, and that network coverage was available Australia-wide.
Unfortunately for VIPtel, and the customers, the court found that none of these statements were true.
As a result of the court action, the court declared the directors, Manan Chopra and Vishal
Gupta aided, abetted, counselled or procured the contraventions of the
Act by VIPtel.
Apart from the refunds and being told not to engage in such conduct
again, the company was further ordered to arrange for the broadcast of
a community service announcement in
indigenous communities to educate consumers about telemarketing calls;
to implement a Trade Practices compliance program, and to pay costs of
$50,000 to the ACCC.
In making the orders Justice Reeves said: "the most egregious aspect
of EDirect's conduct was in its selling its mobile phones and service
plans to people living in remote areas of Australia, including remote
Aboriginal communities, when the slightest enquiry on its behalf would
have disclosed that those mobile phones could not connect to the Optus
GSM network because that network did not provide coverage to those
remote areas of Australia."
He further stated: "Similar observations could be made about
EDirect's conduct in publishing statements and maps on the VIPtel
website which clearly conveyed the impression that EDirect was able to
provide mobile phone coverage to almost all of the Australian land
mass. Again the slightest enquiry would have revealed to EDirect that
this representation was quite untrue."
"The likelihood of detection of these sorts of
breaches is slight, particularly in remote areas of Australia, and for
that reason the full force of the law should be brought to bear in
circumstances where, as is in this case, the authorities have managed
to detect such breaches," he said.
ACCC Chairman, Mr Graeme Samuel, said it was appalling that
consumers were committed over the telephone to direct debit contracts
that would ultimately cost them from $900 to $2,300 where there was no
mobile service available to them.
"It seems the telemarketers had a flagrant disregard for the truth
in their pursuit of customers. The telemarketing calls, which
originated in India, were often received by indigenous consumers for
whom English was a second language. This factor combined with the
agreeable nature of many indigenous consumers made them an easy target," said Samuel.
"The misleading conduct was exacerbated when some customers rang to
complain and were given no assistance. One customer in a remote
indigenous community was told that he should try standing on his roof
to obtain a signal in circumstances where the nearest reception was 230
kilometres away," he said.
What is amazing is that the company, fought this action at all and did
not refund their money immediately. Or that Singtel didn't pressure
them to.
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