EDirect Pty Ltd, trading as VIPtel Mobile has had proceedings instituted in the Federal Court, Darwin against it by the Australian Competition and Consumer Commission (ACCC) for allegedly misleading customers.
The ACCC alleges EDirect engaged in both misleading and unconscionable conduct in entering into verbal contracts with consumers for mobile phone packages via telemarketing.
The ACCC alleges EDirect made misleading representations to customers that a friend or family member ‘loved the calling plan’ they had been offered by VIPtel and the bonus goods they had received, as well as telling the customer they had pre-approved credit for a mobile phone plan and the customer could therefore afford the mobile phone contract on offer.
The ACCC further alleges EDirect engaged in unconscionable conduct in its sales method and in its dealings with specific customers by using a high pressure, relentless sales process, this included making misleading representations as well as giving customers information on contract terms in a manner that made it difficult to understand. The ACCC also alleges EDirect created questionnaires for customers which lead them towards a positive affirmation from the customer in order to get their consent to proceed with the contract.
EDirect is alleged to have believed or could reasonably foresee that the above sales process would secure consent from people who were unable to understand the financial or legal matters quickly or in any depth. In addition the ACCC alleges that EDirect pursued customers consent to a contract in order to proceed to make direct debits from the customer’s account even when EDirect had identified or had reason to believe that the person was not in a position to enter into the contract, such as having a disability, being unable to afford the mobile phone plan or not having the legal capacity to enter into a contract.
The first directions hearing will be before Justice Reeves in the Federal Court in Darwin at 9 a.m. on Friday 17 September 2010.
