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Federal Court slams company for threatening businesses

Directory service provider found guilty of misleading consumers and acting unconscionably

The Federal Court has found an online directory company guilty of threatening businesses with legal action over services they’d never wanted.

The Australian Competition and Consumer Commission (ACCC) brought the charges against directory listing services provider and publisher of the Australian Business Pages Directory, Australialink Pty Ltd, as well as its director, Rachel Dargie, and general manager, Desmond O’Keefe.

According to the Federal Court, the company sent out Listing Advice Notice (LAN) documents to businesses between January 2006 and June 2008. These documents gave businesses the false impression they had already requested the services or that they would not be charged for the listing. These businesses were then charged $195 plus GST and threatened with legal action if payment was not forthcoming. In some cases, they were incorrectly told legal proceedings were already underway.

“This is a great result for small businesses that are constantly flooded with unsolicited requests to sign up for directories or advertising,” acting ACCC chairman, Peter Kell, said. “Often businesses aren't aware they have been misled until they receive a bill in the mail.”

Australialink has been ordered to contact each person it invoiced between January 1, 2007 and December 3, 2008 to notify them of the Federal Court’s action and their right to seek compensation.

The three accused parties have been ordered to pay the ACCC’s legal costs, and refrain from using LANs for seven years. Dargie and O’Keefe have also been ordered to attend trade practices training.

Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.

More about: ACCC, Australian Competition and Consumer Commission

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