The ACCC has taken 11 corporations trading as SoleNet and Sure Telecom (Harrison Companies) along with its director, James Harrison to the Federal Court after breaching Australian Consumer Law.
Since 2011, various Harrison companies have provided telecommunications services to residential and small businesses.
According to the ACCC, the Harrison companies failed to seek customer authorisation for transferring their contracts to other Harrison companies and then harassing them for not paying their early termination or cancellation fees.
The ACCC alleges various Harrison companies engaged in unconscionable conduct such as ceasing trading and winding up companies which incurred regulatory sanctions and unpaid debts to regulators; purporting to transfer customer contracts between Harrison companies without customer knowledge or consent and seeking payment from them on early termination and cancellation fees when there was no contractual right to payment; referring these debts to a debt collection agency and law firm, which then sent letters demanding the payments of the early termination and cancellation fees between the ‘new’ companies and the transferred customers, when in fact the new customers hadn’t entered into relevant contracts with the ‘new’ companies; as well as engaging in undue harassment of transferred customers in relation to the payment of these alleged debts.
The ACCC also alleges that James Harrison was involved or knowingly concerned in the contraventions.
ACCC Chairman, Rod Sims, said customers were not informed about, and did not consent to their telecommunications contracts being transferred to other Harrison companies, which the ACCC alleges was largely to avoid regulatory difficulties and debts.
“It is alleged that this conduct was then compounded by the Harrison companies seeking to enforce early cancellation and termination fees which were not part of any contract between the consumer and that company, and harassing consumers for payment of these alleged debts,” Sims said.
“Unconscionable conduct and conduct involving ‘essential services’, such as telecommunications services are current enforcement priorities for the ACCC.”
The ACCC is seeking declarations, injunctions, consumer redress, penalties, corrective advertising, a disqualification order against Harrison and costs.
Also assisting in ACCC’s investigation is the Telecommunications Industry Ombudsman (TIO) and the Australian Communications and Media Authority (ACMA).
The matter is listed for a case management conference on April 12 in Melbourne before Justice Moshinsky, who also placed freezing orders against James Harrison, Harrison companies and assets controlled by Kelly Harrison.