A former Australian MVNO has been found guilty of engaging in misleading and unconscionable conduct while marketing services and seeking unpaid payments.
Excite Mobile's two directors now face injunctions, penalties and a disqualification from managing a corporation for five years, through a Federal Court case lodged by the Australian Competition and Consumer Commission (ACCC).
Excite Mobile, which had been offering services through an MVNO contract with SingTel subsidiary Optus, engaged in such underhanded tactics as falsely claiming the Optus network covers customers in areas where services are not available, ACCC said.
The MVNO also set up a complaints handling organisation called “Telecommunications Industry Complaints,” and deceived customers into thinking their complaints were being addressed by an independent organization.
The company even sent out letters from a fictional independent debt collector. The court found that these letters represented undue coercion against consumers in relation to obtaining payment.
In a number of the letters, Excite Mobile falsely claimed to have the powers to take corrective measures including repossessing all valuable assets from a customer in arrears – including childrens' toys.
The court also upheld ACCC's complaint against Excite Mobile's “day cap” clause in its mobile contract, which allowed customers to only use the network for a limited time per day – in some cases as little as two minutes - before being charged excess usage fees.
“The conduct of Excite Mobile was outrageous. Inventing a fictitious complaints handling body to deceive customers and creating a fictitious debt collector to coerce the customer to pay an alleged debt to Excite Mobile is unjustifiable and unacceptable,” ACCC chairman Rod Sims said.
Excite Mobile operated between 2008 and 2011.