ACCC Takes VIPtel To Court Over Sales Conduct
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The Australian Competition and Consumer Commission (ACCC) is taking VIPtel Mobile to court alleging that it misled customers into buying mobile phone contracts with them, and that they had acted unconscionably by entering verbal contracts with consumers for mobile phone packages via telemarketing.

The ACCC alleges that VIPtel sold plans by exerting high pressure sales methods with specific customers. Customers were told that friends and family members who had taken out VIPtel calling plans had ‘loved the calling plan’ and the bonus goods they had received, and that since customers had been pre-approved for credit on a mobile plan, that they would therefore be able to afford the mobile phone contract being offered to them. 
The ACCC said the methods adopted by EDirect to close sales deals amounted to ‘unconscionable conduct’ and that they had been ‘relentless’ in their pursuit of customers. 
These included conveying information about contractual terms which customers found difficult to understand, requiring them to answer only ‘yes’ or ‘no’ to questions designed to gain their consent to enter into a contract, along with composing those statements and questions in a manner that would gain a positive answer from the customer. 
Customers were also kept on the phone for long periods of time and transferred between telemarketers during sales. They were also not provided with an opportunity to read the terms and conditions of the contract before giving their consent to enter into the contract. 
In its allegations, the ACCC also maintained that EDirect’s sales methodology was deliberately designed to secure consent from persons who were unable to understand financial and/or legal matters quickly or in any depth.
In its dealings with some customers, the ACCC said that EDirect made direct debits from customers accounts while knowing that the customer did not want, or could not afford, the plan being offered, when customers were clearly upset by their sales strategies, and in some cases were unwell, or even that they had a disability, or could not understand the terms of the contract. 
The ACCC is seeking declarations and injunctions to stop any contravening conduct and improve EDirect’s business practices, as well as court costs.
EDirect has advised the ACCC that it will provide undertakings to the court, in lieu of the ACCC pursuing interim interlocutory orders.
EDirect said it will not make the representations referred to above that the ACCC alleges are misleading, and that it will ensure its telemarketers certify in a record maintained by EDirect, that, to the best of the telemarketer’s belief:
the terms of the proposed agreement were clearly and accurately explained to the call recipient, and
that he or she had no reason to believe from his or her discussions with the call recipient that the call recipient did not wish to enter into the agreement, fully comprehend the terms of the agreement or fully comprehend the consequences of entering into the agreement.
The first directions hearing will be before Justice Reeves in the Federal Court in Darwin on Friday 17 September 2010.