Online directory service Australialink has been found guilty by the Federal Court for engaging in conduct likely to mislead or deceive businesses.
Australialink, based on the Gold Coast, publishes a number of online business directories, including the Australian Business Pages Directory. Each year it sends out more than a million directory requests to businesses across Australia. The court, in conjunction with the ACCC found that between January 2006 and June 2008, Australialink, through its director Rachel Dargie and general manager Desmond O’Keefe, solicited customers for its directory listing services by sending out a document called a “Listing Advice Notice” (LAN) to a number of businesses.
According to the ACCC, the LAN gave the misleading impression that businesses had already sought Australialink’s services or had an existing business relationship with it. Once businesses signed and returned the LAN they would be invoiced $195.00 plus GST.
The court also declared that Australialink, along with Ms Dargie and Mr O’Keefe, acted unconscionably and with a lack of good faith towards businesses by intentionally misrepresenting that it had instituted, or was in the process of instituting, court proceedings against those businesses that had been invoiced for the listing but had not paid.
Australialink has been ordered to write to each person it invoiced between January 1 2007 and December 3 2008, notifying them of the proceedings brought by the ACCC, outlining the court’s findings and advising that they may have a private right of action to seek compensation if they consider they have suffered loss as a result of Australialink’s conduct.
Commenting on the outcome, acting ACCC chairman, Peter Kell said: “This is a great result for small businesses that are constantly flooded with usolicited requests to sign up for directories or advertising.”
The ACCC has warned small businesses to be vigilant about unsolicited letters and to put safeguards in place to protect themselves from directories and similar scams.
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