The Federal Court in Darwin has penalised EDirect Pty Ltd (trading as VIPtel Mobile) for a second time, issuing a $2.5 million penalty for making misleading or deceptive representations to 350 customers from remote and regional communities across Australia. EDirect had represented that it had verified the availability of coverage at the customer's nominated address when it had not done so, and when there was no such coverage available in the area. The Federal Court had previously given judgment against EDirect for telemarketing phone services into no coverage areas in 2008.
Justice Reeves of the Federal Court determined the amount of the pecuniary penalty to be imposed on the basis that it should be of such a level to make it 'commercial suicide' for any other operators in mobile telephone industry, or elsewhere, to even contemplate taking the risk of engaging in similar conduct.
The ACCC has also successfully negotiated the payment of over $100,000 in consumer refunds from both EDirect (now liquidated) and the company which took over EDirect’s assets.
For more information, please see the ACCC Media Release.