Reseller to pay $320k in penalties over cold calling

Telecommunications reseller Startel has been ordered to pay $320,000 in penalties for misleading customers on cold sales calls, including indigenous clients in remote parts of the Northern Territory.

The Australian Competition and Consumer Commission took Startel to the Federal Court alleging its staff failed to inform customers of a 10-day cooling off period when attempting to sell mobile phone plans, and did not provide documents that would help them decide if they wanted to proceed, over a two-year period from 2011.

The consumer watchdog also alleged Startel took money from bank accounts during the cooling off period.

The court declared the conduct was in breach of Australian Consumer Law (ACL).

"Consumers have the right to reconsider and opt out of unsolicited contracts and they should not be told otherwise," ACCC commissioner Sarah Court said in a statement. "It is particularly concerning that Startel accepted payment during the statutory cooling off period."

"Startel breached law that is designed to protect consumers when they have been surprised by a telemarketing call and persuaded to enter into a voice contract."

The ACCC said more than 2500 customers were affected. Complaints were first made when the ACCC was visiting a remote Indigenous community in the Northern Territory in 2011.

In addition to the financial penalties, Startel was handed a community service order to "publish and advertise an online educational webpage to inform consumers about their rights when they receive a telemarketing call".

A Startel spokesperson told CRN the company had cooperated with the ACCC throughout its investigation and said it "admitted the contraventions and agreed to the facts, remedies and penalties and has worked hard to put them right".

In yesterday's judgment, Justice Berna Joan Collier said the contraventions were in no way "trivial, or mere technical breaches of the ACL".

"In the circumstances of this case the contraventions of the ACL by Startel were serious, numerous, and occurred over a relatively lengthy period of time," she said.

Cold calling sales tactics to remote communities has been a topic of concern for the ACCC. Last year the competition watchdog produced a video to educate isolated Indigenous consumers to not be bullied or pressured into a mobile phone contract.