OzDirect Online Brands, and its director, Paul Albright, have been convicted of knowingly misleading consumers.
Federal Court action was launched by the Australian Competition and Consumers Commission (ACCC) against the online retailer in July last year after numerous customers claimed to have paid the company for goods that were never delivered.
The consumer watchdog alleged OzDirect and its director had contravened the Trade Practices Act 1974.
During the legal proceedings, the court found between September 2008 and July 2009, OzDirect had told customers the delays were resulted from a large influx of orders and would arrive in due course. However, the company was on credit hold by its supplier for exceeding the terms of its credit and items would not be available until OzDirect had paid the supplier.
The retailer also made misleading claims to customers relating to providing a refund for undelivered items or faulty goods. Customers were told refunds would only be issued in the form of a credit note that could be spent on OzDirect websites.
The company has previously claimed it sold brands such as HP, Seagate, Microsoft, Symantec, AMD, IBM, Kingston and Cisco to consumers "directly from the manufacturers' warehouse – no middlemen", but all vendors denied involvement with the retailer.
The court made injunctions forbidding OzDirect and Albright from accepting payment for goods when aware - or reasonably aware – they are unable to provide products for the next five years.
OzDirect and Albright are also to refrain from making misleading claims to consumers regarding availability of goods and provision of refunds.
Websites concerned include www.ozdirect.com, www.ozdirect.com.au, www.ausbuys.com and www.ausbuys.com.au, which were down at the time of going to press.
Concerned customers that have shopped on those sites with a credit card and are expecting a refund for undelivered goods are advised by the ACCC to ask their bank to apply a charge-back on their account.
OzDirect and Albright were ordered to pay the ACCC’s court cost.
ARN's attempts to contact OzDirect's Martin Place, Sydney office by phone were not answered.