The operator of a group of small telcos has been found to have engaged in "unconscionable conduct" by restructuring his companies to avoid regulatory fines and unpaid debts, and unfairly demanding early termination and cancellation fees from customers.
The federal court also yesterday found James Harrison and his telcos SoleNet and Sure Telecom had unduly harassed at least four customers for payment of services.
The ACCC initiated the court action in April this year, claiming Harrison restructured his operations specifically to avoid having to pay sanctions and debts.
As part of the restructure, the ACCC alleged customers were shifted between companies in his group without their knowledge or consent, and were then subject to demands for payment of early termination or cancellation fees despite having no contract with the new company.
Yesterday Justice Moshinsky said Harrison was directly involved in the unconscionable conduct.
"He was aware that the transfers involved, at best, a lack of transparency or, at worst, trickery or deception, vis-à-vis customers," the judge said.
“This outcome sends a clear message to companies and directors that they cannot avoid their obligations under the Australian consumer law by corporate restructures which involve transferring customers without their consent,” ACCC chairman Rod Sims said in a statement.
Both sides were asked to file submissions on penalties before February 10.
The ACCC has previously said it wants Harrison disqualified as a business operator, as well as penalties and avenues for customer redress.