The director and sales manager of Artorios Ink, a telemarketing company that sold printer cartridges, have been fined $100,000 after engaging in misleading or deceptive conduct with small businesses.
The Federal Court has ordered Artorios Ink director, Tuan Nguyen, and its sales manager, Thuan Nguyen, to pay a penalty of $50,000 each after they admitted to being knowingly concerned in contraventions of the Australian Consumer Law.
The Court also made declarations that the two individuals would not manage or be a director of a corporation for five years.
Tuan Nguyen and Thuan Nguyen admitted to acting deliberately to mislead and deceive small businesses to generate ink cartridge sales.
Artorios Ink sold printer cartridges to businesses from 2008 to 2012 and went into voluntary liquidation in February after the ACCC instituted proceedings against it in September 2012.
The Federal Court found during 2011 and 2012, Artorios Ink engaged in misleading or deceptive conduct and made false or misleading representations to five small businesses including that they agreed to purchase printer cartridges from Artorios Ink, when there wasn't an agreement; that Artorios Ink was an approved, regular or current supplier of the business, when it wasn't; and that Artorios Ink had instituted proceedings in the Magistrates’ Court of Victoria against the business to obtain payment for printer cartridges, when in fact it had not instituted any proceedings.
The Federal Court also found that Artorios Ink asserted a right to payment for unsolicited goods by sending demands for payments for ink cartridges which the small businesses had never agreed to purchase.
In her reasons for judgment, Justice Mortimer inferred there was a deliberate and calculated plan constructed to misrepresent to small businesses (through calls to unsuspecting employees or shop managers) some kind of existing supply relationship, then to take advantage of the misrepresentation to supply goods and then demand payment.
“The most serious aspect of the conduct was its premeditated character, the implementation of a system of deceiving unsuspecting employees and owners of small businesses into believing that they had ordered printer cartridges and were obliged to pay for them,” Justice Mortimer said.
ACCC deputy chair, Dr Michael Shaper, said the penalties send a warning to traders.
“The ACCC will continue to intervene to protect small businesses from traders who attempt to trick them into paying for goods or services they did not purchase,” he said.