Brisbane telco Startel Communication Co is in the sights of the Australian Competition and Consumer Commission for contravening consumer protection legislation while telemarketing mobile phone services.
The regulator is taking legal action against the telco, and alleges that Startel failed to inform consumers of their cooling-off rights and did not provide a copy of their contracts within the prescribed five days.
ACCC also alleges Startel did not provide consumers with contracts in the form required under Australian Consumer Law and that the telco supplied services and accepted payments from consumers during their ten-day cooling off period.
The acting chair of the ACCC, Delia Rickard, said consumer protection in the telecommunications sector was an enforcement priority for the regulator.
"Companies using telemarketing must ensure that their practices and compliance programs reflect consumer laws as the ACCC will take action when necessary,” she said in a statement,
A scheduling conference for the case, which was filed in the Brisbane Federal Court, is set to August 13 this year.
ACCC is seeking declarations, injunctions, a community service order as well as an order for Startel to write to affected customers and to establish and maintain a compliance programme.
The regulator is also seeking pecuniary penalties and costs.
A spokesperson for Startel said the company had cooperated with the regulator on a transparent basis, and had used the ACCC’s observations and requirements to amend its processes and policies.
In March this year, Startel refunded customers a total of $12,258 for a system glitch that added five to six seconds to 1,294 customers' calls between July 2009 and February 2012.
The telco's new owners discovered the problem in February last year and notified the Australian Communications and Media Authority (ACMA) about the problem, which in turn found Startel in breach of the Telecommunications Consumer Protection and the Call Charging and Billing Accuracy codes.
At the time, ACMA commended Startel for having reported the problem and reimbursing customers.