ACCC today launched heavyweight legal proceedings in the Federal Court of Australia against 28 parties involved in ‘bundled services deals’, alleging that customer equipment is ‘secretly’ financed while the customer (wrongly) believes they are getting ownership of it for free.
The deals, pitched at SMEs, involve tens of millions of dollars all up.
ACCC alleges that the way the deals operate and were marketed, there have been extensive breaches of sections 52, 53(e) and 53(g) of the Trade Practices Act 1974 and/or sections 12DA(1), 12DB(1)(e) and (12DB(1)(g) of the Australian Securities and Investments Commission Act 2001.
ACCC also says that these kind of bundled services deals constitute exclusive dealing, in breach of section 47(6) of the TPA.
Make no mistake, this kind of action is a big deal for ACCC and they’ll run it accordingly.
What’s alleged
Basically, ACCC says that a small industry has grown up where SMEs are offered great communications deals where they are lead to believe these kinds of things:
- equipment provided under the deal is free
- total charges will not exceed either a stated amount or the customer’s previous charges
- total charges will not exceed a specified amount per month
- the only contract is with the telecommunications company
- call prices will be lower than the customer’s existing provider
- fixed line services will be ported to the new telco within a short time
- the telco will supply mobile services using the customer’s existing mobile carrier.
ACCC says these things were often untrue. Especially, a finance company was smuggled into the deal to rent the equipment under an arrangement the customer wasn’t really aware of and had no choice about.
The bullet points above would be misleading and deceptive conduct, if untrue. The involvement of a finance company without a free and informed decision by the customer may constitute ‘exclusive dealing’ aka ‘third line forcing’, an illegal practice where Trader A conditions a sale or service to customer on a separate purchase by customer from Trader B.
What does ACCC want ?
According to its announcement, the ACCC seeks court orders including:
- fines against certain respondents
- declarations that certain respondents engaged in exclusive dealing
- injunctions restraining certain respondents from engaging in the same conduct in the future
- orders requiring certain corporate respondents to implement a trade practices law compliance program
- orders requiring corporate respondents to publish corrective advertisements in newspapers and on their websites
- orders requiring each finance company to write to any customer who entered into bundled services deals advising them of their rights under section 73 of the TPA before it commences any proceedings against the customer
- costs.
Who’s in the gun ?
A cast of dozens …
|
No. |
Respondent |
Alleged Conduct |
|
1 |
Link Solutions Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
2 |
Service LS Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
3 |
Axis Telecoms Pty Ltd |
Exclusive dealing Misleading or deceptive conduct False or misleading representation with respect to the price of a service False or misleading representation concerning the existence or effect of a condition of a contract |
|
4 |
Service AT Pty Ltd |
Exclusive dealing Misleading or deceptive conduct False or misleading representation with respect to the price of a service False or misleading representation concerning the existence or effect of a condition of a contract |
|
5 |
Sonofon Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
6 |
Service SO Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
7 |
Telecom One Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
8 |
Service TO Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
9 |
George Tawaf (Director of Axis Telecoms Pty Ltd) |
Procured exclusive dealing by Axis Telecoms Was knowingly concerned in exclusive dealing by Axis Telecoms Was knowingly concerned in, aided and abetted or procured misleading or deceptive conduct Was knowingly concerned in, aided and abetted or procured false or misleading representation with respect to the price of a service Was knowingly concerned in, aided and abetted or procured false or misleading representation concerning the existence or effect of a condition of a contract |
|
10 |
Mark Nesbitt (Director of Axis Telecoms Pty Ltd) |
Procured exclusive dealing by Axis Telecoms Was knowingly concerned in exclusive dealing by Axis Telecoms Was knowingly concerned in, aided and abetted or procured misleading or deceptive conduct Was knowingly concerned in, aided and abetted or procured false or misleading representation with respect to the price of a service Was knowingly concerned in, aided and abetted or procured false or misleading representation concerning the existence or effect of a condition of a contract |
|
11 |
John Masia (General Manager of Axis Telecoms Pty Ltd) |
Procured exclusive dealing by Axis Telecoms Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
12 |
Barry Kennedy (Disputes Manager for Axis Telecoms Pty Ltd) |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
13 |
WorldTel (Aust) Pty Ltd |
Exclusive dealing Misleading or deceptive conduct False or misleading representation with respect to the price of a service False or misleading representation concerning the existence or effect of a condition of a contract |
|
14 |
WorldTel Corporation (Victoria) Pty Ltd |
Was knowingly concerned in exclusive dealing by WorldTel |
|
15 |
Skylink Communications Pty Ltd |
Was knowingly concerned in exclusive dealing by WorldTel Misleading or deceptive conduct False or misleading representation with respect to the price of a service False or misleading representation concerning the existence or effect of a condition |
|
16 |
Romeo Wehbe (Director of WorldTel Corporation Pty Ltd) |
Procured exclusive dealing by WorldTel Was knowingly concerned in exclusive dealing by WorldTel |
|
17 |
Manoel Wehbe (Director of WorldTel Corporation Pty Ltd) |
Procured exclusive dealing by WorldTel Was knowingly concerned in exclusive dealing by WorldTel |
|
18 |
Fakhr Fakhr (Director of WorldTel Corporation Pty Ltd) |
Procured exclusive dealing by WorldTel Was knowingly concerned in exclusive dealing by WorldTel |
|
19 |
Joseph Ayoub (Finance and Operations Manager of WorldTel Corporation Pty Ltd) |
Was knowingly concerned in exclusive dealing by WorldTel |
|
20 |
Australian Integrated Finance Pty Ltd |
Was knowingly concerned in or aided and abetted exclusive dealing by Axis Telecoms Was knowingly concerned in or aided and abetted exclusive dealing by WorldTel |
|
21 |
Enterprise Finance Solutions Pty Ltd |
Was knowingly concerned in or aided and abetted exclusive dealing by Axis Telecoms Was knowingly concerned in or aided and abetted exclusive dealing by WorldTel |
|
22 |
CIT Group (Australia) Pty Ltd |
Was knowingly concerned in or aided and abetted exclusive dealing by Axis Telecoms |
|
23 |
Queensland Communications Company Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
24 |
Service QCC Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
25 |
Clear Communications (EurAst) AB |
Was knowingly concerned in or counselled or procured exclusive dealing by Axis Telecoms |
|
26 |
Clear Telecoms (Aust) Pty Ltd |
Exclusive dealing |
|
27 |
Anthony Hakim (Director of National Telecoms Group Pty Ltd and Clear Communications (EurAst) AB)) |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
|
28 |
National Telecoms Group Pty Ltd |
Was knowingly concerned in exclusive dealing by Axis Telecoms |
Where to next ?
The cases have been listed for a directions hearing in the Federal Court on 17 October 2008.
Our take on it
The allegations are at the serious end of trade practices breaches. We’ll be watching this one closely.






we also have been ment to beleave komtel was only involved never spoke about capital finance involvment or seen paperwork,
diego, sam,ren
i thought capital finance was a big company and honest, and not join up with dishonest peaple in a scam to make money off inicent peaple, by riping them blinde in a contract that nobody would signe if not geting anything back that was promised from begining,
if thats the case they should also be closed down or find out who delt with komtel and sack them all.
diego,sam,ren
as most people are aware, the majority of companies involved in these illegal scams are owned either by a promoter, a family member or friends/business partners. They continue to change business details whenever they start to become investigated and, in doing so, are able to continue to rip off australian small businesses. all parties involved need to be barred from being involved in any means throughout the telecommunications & finance industry.
if i was the accc i would be trying to speak with employees of ntg/direct/prime/axis/clear (“the billing company”) as well as the “dealers” fuszion/oryzon/3call/clearcare/telecom 1, xcelleron, choice, sonofon/crystal, link solutions, qcc/axis qld, ezytel, ect, there are so many at least another 20-30 plus just off the top of my head and they are all pretty much the same company… BTW that’s not even getting into the “finance” companies like cit, ifs, ect
We got duped by WorldTel. As far as I knew I was approved for $1500.00 worth of finance that would go toward equipment on a phone bundling/hire/purchase arrangement. Since Worldtel closed, I got in touch with CAFG to stop payments and they tell me I had applied for $13000.00 worth of finance that I need to repay.
Now CAFG is not seeking any orders for me to pay, it is Capital Finance.
I knew CAFG only by name as they were deducting funds from my bank account. This I believed was all going toward a phone bundling account. I had never even heard of Capital Finance until they issued me with a letter of demand some two weeks ago now.
I am an ex employee of Worldtel Corporation in Strathfield.
I can fully understand Mikail’s sorrowful plight and add he is only one of many.
Hopefully, Worldtel will not be able to simply change company name and continue their trade as normal, just as they did before Worldtel.
Hi, my name is Nancy and I am a law student from the university of technology Sydney, I am currently involved in a group community project for our commercial law subject and my group and I are actually trying to raise awareness about the activities that these companies have participated in, which are in breach of the TPA. We are wondering if anyone is willing to speak to us or provide us with any further information (without breaching any privacy requirements).
There is a good chance that our paper will be published (however if anyone wishes to remain anonymous, we will happily agree) and we are hoping that it will serve as a warning for future companies.
If anyone has anything they can assist us with, please feel free to email me at
Hi, has anyone had any dealings with Blitz Telecom & Finrent. Our 2 year deal was up with Blitz, their salesman had told us at the end of the 24 month period we could offer Finrent $1 & own the equipment outright (2 computers).
We have paid $280 per month over 24 months which has now blown out to 31 months. Blitz went bust, Finrent keeps deducting $280 payments. We advised Finrent we wanted to end the contract after the 24 months period and offered the $1 payout. No reply for several months then we got an email stating our options with finrent were to continue renting for another 12 months @ $190 per month, purchase equipment for $1350 or return the equipment. Very expensive computers! We also asked Finrent to supply us with a copy of the agreement but nothing has been forthcoming. They just continue to debt our account!
IF you have information that can help us with the above companies please leave a post here and I will contact you via e-mail.
I dont want them to know what I am doing or what info we have but we are slowly but surely gaining ground on these (in my opinion – misleading companies).
Hi, we were caught originally by Nova Telecom to save money for the church. At the end of the sales pitch the salesman asked if we wanted free equipment, massage chairs etc. We did not need new equipment, “how about new phones and a TV?”
Unfortunately my boss, the Reverend, who did not understand, signed a direct debit AND THE REST YOU ALL KNOW!!! We were debited $440 per month for the next 5 years for a phone system (useless) worth $800 on ebay and a plasma TV worth $2500.
On top we pay phone bills to Clear Telecoms. I have been in contact with the Telecommunication Ombudsman, but they dont deal with “bundled deals” WHO DOES?
I have managed to get out of the direct debit with help from the bank, however, the whole thing STINKS!!! If anybody out there plan a legal action, we will join in.
youre not on youre own out there thats for sure, we know of many including ourselves who were sold a beauty of a deal, same as you we are up for $ 440 a month which when we were told would cover all our calls etc, we have one very expensive tv, computer, 4 mobiles and hands free kits. all the phones and computers have crashed so they are even more expensive.ontop of that we were gettin over the top phone bills, there excuse was you were never put on the right plan?, we have cancelled most of our phones and transfered back to a major carrier which we have capped plans including equipment. i guess if it sounds to good it is.
another angry customer of axis/link/quickfund etc. happy to provide with information. contact me
I have just started for a company who has previously signed an agreement supposedly with QLD communications company. We now have a lease with quikfund and phone bills from Clear telecom.
can someone please give me info or help on what to do as I know this is dodgy.
Hi,i would have thought Fuszion would have been one of the more honest operators out there and fully disclosed 3rd party funding of equipment? Any feedback on this?
There are thousands of victims of these scams out there. We have a class action at present and have been in this for 1 year now. There is only one way to fight this and that is collectively. Go to this link http://www.aussielegal.com.au/forum/forum_posts~TID~4797~KW~Dight~PID~17614.htm#17614 and you will find on page 13 what many of us have done with ideas for communication.
I sighned with sabasorp on a $600 deal they changed hands to Xel connect and left me paying a Hal Leasing trying to get $600 a month out of me now they to take me for 30,000 can anyone help I stopped dealing through Xel
yes, I (we) are victims to Scam by Emerald Solutations/EFS. Same story, free call credit and Equipment. I did take EFS to CTTT but I had to withdraw the Application before I got a result.
A small business,we were duped too! Signed up in 2005 on a 5 year contract, they “gave” us Plasma TV’s, home theatre systems & set top boxes! Woo Hoo!! Tried to cancel a year ago and received an invoice for $13,000!! We are still to this day paying over $600 a month, and we’ve already gone back to Telstra! We were/are dealing with Axsiom, Prime/Clear Telecoms and AIF. I am currently trying to return the equipment, and it is proving very difficult to get anyone to talk to! ACCC need to kick their arses and they should be made to repay everyone they have ever ripped off! Theives, how do they sleep at night?
I’m looking to contact as many people as possible that have signed up with clear telecom, axsiom & Quikfund. Please contact me ASAP as I have found an answer to our problem. Leave a post here for me.
Hi, I have a contract with AIF, sold to me by Sonofon and the telco, Clear.
Similar story to all those above. I have another 10 months to go on a 36 month contract and had enough of it.
Can anyone provide an update on legal proceedings against these guys?
Thanks,
If you have had dealings with clear telecom, axsiom and / or Quikfund and are as unhappy as we are, we have found someone that can assist with the issue.
Leave a post here.
Would appear the finance co’s are scrabbling to lodge claims in the court and sue as many victims as they can before the ACCC goes to court with the 28 abovementioned scumbag companies. I got served on Boxing Day with papers. Quikfund, QCC, Technix and Clear Telecom all dishonest, what a scam. They want $43,000 for a photocopier. Can you believe it. I’m happy to go to court as I have other information if anyone wants to chat with me. Perhaps we can exchange some of our research etc.
We are a small business and the the stories I have read on this site are very similar to my. Got suck in with Ezytel Solutions (closed down) and Enterprise Finance Solutions, phones with Clear Telecoms. Have paid $890 per month for past 3 years for Plasma TV, Phone System, Laptop computer, now they want me to buy back the rented equipment at end lease (Jan 30 2010). I thought I was the only one conned. AS well as this site see http://www.telco-finance-scams.com How are these people getting away with it. Tell everyone on the net so the word spreads there is strength in numbers and the more people know about these hopefully the less people they will con. The finance company don’t give a dam they just said I should have read the contract – none was supplied at the time of signing, just confused me with signing lots of paperwork – they said it was internal paperwork. They disappeared after 6 months.
Yes , was scamed. Blitz and National equipment rental, now taken over by Macqurie, $880 per month. When I told them that i am joining TelcoFinance-Scamed, within 48 hrs they send a letter of demand $20K in 7 days, What do i do, any suggestion? anyone else scamed by Blitz?
we are also victims of this scam
we have so far paid $31900 for a $5000 system
the ACCC case decision is still not handed down
by the federal court
I checked with the ACCC media unit today
who confirmed this is the situation
we are going to do the following
we are requesting our bank to halt the payments
when the letter of demand is recieved
from the finance company ( named by ACCC)
we will insist that any court case be heard
in the federal court as the TRADE PRACTICES ACT
is a FEDERAL ACT and it is this ACT which deals with exclusive dealings third line forcings misleading and deceptive conduct
Do not accept a local court hearing . have your lawyer read up on it and have the case transferred to the FEDERAL COURT
you are entitled to do this
Alternatively we could consider a class/group
action here in nsw
I have approached our lawyers with a view to conducting a case if there is the need
our lawyers are a small group of city based lawyers specialising in commercial law they are very good
nothing is free.. nothing is guaranteed, but by sharing the risk we reduce our legal costs
this scam is a gross act of indecency on small business we cant afford it and Im sure you cant
as well
Have been scamed too.Signed up with Qld Communications company in Feb 2008 for 5 year contract. Receive a bill every month from Clear Telecoms and one from Quikfund for the so called free equipment.
Has anyone returned their equipment and asked for the rental agreement to be cancelled? Could this be done ?
Clear telecoms and quickfund scam
We joined the class action through http://www.telco-finance-scams.com the more we are together the better is for all of us.
We are also looking for info how to file case at VCAT in Victoria against Quikfund, if anybody can help please email me, thank you
Same story here. Was conned into a deal with Queensland Communications Company 5 years ago. (AXIS / Clear Telecoms) Found out later that AIF was involved but was not told at the time and have no copy of the contract.
Today I rang ATF and wanted to know how much longer my contract went for. I was told it was supposed to finish next month but in my contract, (ha ha) it said that I had to notify AIF 3 months in advance of the 5 years finishing or I had to pay for another 3 months! Then I had to buy the equipment or give it back to the company.
I was told I had to speak to a guy called Tony in Remarketing (0291129527). Of course Tony was not there and the call went to message bank. Why would he return a call when the longer he doesn’t the longer the company can cash in on my money!
This is outrageous. The equipment is out of date and we are not even using the computer any more The telephone handsets / unit we were told, were part of the phone system that had to be installed and we never even installed those because we already had a commander type system. When I asked what I should do with them, I was told – if you don’t want them, just throw them out! Now I will have to buy them back and I think when we moved I did throw them out. The printer/fax is grinding along, but only just!
I have written to Tony Bilson Federal MP and from all the stuff I have read on the web gather that there is nothing that can be done against these cowboys because the Federal Govt won’t act.
Does anyone have any current information as to where things are at at the moment?
HI i was scammed by axis what can i do about getting out of this mess ? thank you
Like evryone else i was also scammed by cleartelecom and quickfund, unlike evryone else i didn’t know about any finance agreement, i thought i was just signing for cheap phone calls and got a free plasma etc as enticement to sign for 5 years. I was only allerted to the fact when two direct debits started occuring from my account. It has only been recently they have started chasing me for money (i stopped paying about a year ago) i knew they were having legal troubles and i thougt they had finally been busted for being the scammers they are!
Obviouisly not. Has anyone got any more recent news or ways to stop them??
Not one person caught up with the scams have mentioned that the whole value of monthly repayments constitutes a full tax deduction of 30% of course not it is a positive spin, the house of card collapses when the Telco goes out of business, the finance companies provide the finance upfront to the Telco on behalf of the equipment renter, they typically earn around 12-15% interest however what a lot of people here fail to mention is that the finance company carries the can when people stop paying them back, it is no good blaming the finance companies as they have paid out the full amount from day one.
I am having a similar situation to most of the above mentioned comments and I was wondering whether there has been any class action that I could join. What do I do? Please advise if so.
Well Well
Fuszion set up in the uk with their own finance company…I think they were called Forte Investments
They use to “sell” over spec Panasonic Phone systems installed by morons..
The customer never knew what they were getting into and could of got better deals elsewhere
I think they have left these shores now and good ridance
In my 2nd year under a contract with these con artists. Works out in the end i hire a plasma and a laptop for $33,ooo for five years? Pissed off with myself to asy the least. Anyone know anything re legals of this mob
I have been served court notice by capital Finace to pay $12000 for the remainder of the telephone contract with Komtel. I been to prehearing but advised by Registrar and my Lawyer that my case is weak and better to pay Capital Fimance than to go to court any advise. I have 7 days to pay
I was scammed by worldtel.What I thought was a phone deal ended up being 5 years of paying off a ‘free’ tv and at the end of the 5years I get to buy the tv for an additional thousand dollars,unbelievable!
Has anybody got out of contracts like this?
I am the same as above, is there any way of getting out of it.
We were approached by Link Solutins Pty Ltd offering better call rates for all business mobiles and land lines than that our current providers were. We were also offered a selection of new equipment which was to our knowledge to be paid for with the phone bills and was offered as great perk for signing all the phones with them. I have been dealng the phone company every bill with overcharges on calls and the whole thing is just one big scam. We are at the end of our contract and have only now just learnt of these proceedings.. Our areed payout figure of $1.10 is not bein upheld etc. These companies have cost our business over $65,000 and there has been nothing i can do about it. i have been trying troughout the contract. PLEASE HELP
we have been signed aswell and is costing us a fortune in calls aswell as the rental, signed up with axsiom they claim they are not involved with this scam but it seems all the same as quickfund is the finance company. how do i get out of this contract without it costing me $25000?
I have been slugged for over $40k for one of these bundles, Has anyone had any luck going to V-Cat, or have the ACCC gone any further with Telecom One?
i was a employee off fusion/ 3call/ oryzion. they move to NZ and change there company and they change there ownership and took away my 5 month of salries. i was treated very badly in this company. still running a business in NZ doing the same thing and change there company name.