ACMA hauls Sydney-based Red Telecom to court

The Australian Communications and Media Authority (ACMA) has taken Sydney telco Red Telecom and its sole director to court for allegedly failing to comply with regulatory orders.

ACMA said Red Telecom and director Nicholas Kontaxis failed to pay its customers more than $63,000 as directed by the Telecommunications Industry Ombudsman (TIO).

The customer payments are determined by the TIO after a telco is not able to resolve a complaint. When the telcos fail to make the payments, they are then referred to the ACMA for further action such as commencing court proceedings.

In the Statement of Claim submitted by ACMA to the Federal Court of Australia, Red Telecom allegedly failed to comply with seven different orders from the TIO, and ranging from just over $1000 to more than $20,000.

The ACMA said it is seeking penalties of up to $10 million for each contravention of telco laws by a company and up to $50,000 for each contravention by an individual.

The TIO ordered Red Telecom to pay The Axis Brokerage & Trading Company $20,258.80; Angie’s Travel $4,177.87; Hinterland Smash $10,750.86; KJ Real Estate $1,012.34; Joycey’s Sportz’ costs of cancelling the finance contract; Diana Canepa $5,895.60; and The Stewart Family Trust $8,421.60.

All seven parties accepted the ruling, but the ACMA alleged that Red and Kontaxis failed to pay the customers, let alone pay the money within the prescribed time frame of each TIO order.

ACMA claimed that Kontaxis was aware that Red Telecom was a member of the TIO Scheme, but allegedly “caused, authorised, consented to or directed” the company to fail the seven TIO determinations.

The TIO released its own statement shortly after the ACMA's announcement:

“The Telecommunications Industry Ombudsman works with phone and internet providers to resolve complaints consumers make about their services. When these complaints cannot be resolved, the Ombudsman makes decisions that providers must comply with. When a telco fails to comply with the decisions of the Ombudsman, the non-compliant telco is referred to the ACMA for further action,” the Statement of Claim read.

“As this matter is now before the Federal Court, the Telecommunications Industry Ombudsman will not provide further comment.”