Mobile phone ads that promoted a 'free' phone breached the Trade Practices Act 1974 Justice O'Loughlin of the Federal Court has found.
The advertising offered 'free' mobile phones when, in fact, consumers were required to enter into 15 to 18 month contracts with minimum charges from $336 up to $6,300 as a condition of obtaining their 'free' phone.
The Australian Competition and Consumer Commission instituted Federal Court proceedings in Darwin after consumers and businesses complained that the advertising was misleading.
'Traders must be aware that they risk action from the ACCC unless they prominently and clearly disclose the substance and effect of all conditions connected with their promotion,' ACCC Chairman, Professor Allan Fels said today. 'Misleading advertising of this sort adversely affects businesses that stay within the law because consumers are drawn away from ethical businesses by the misrepresentations. ACCC action assists ethical businesses by ensuring that consumers base their choices on accurate information.
'Let this be a warning to the market place that the ACCC will continue to initiate court proceedings where matters cannot be resolved through other means.
'The NT conduct generated more consumer and business complaints to the ACCC in the Northern Territory than any previous matter. The injunctions granted by the court will prevent this conduct being repeated by these traders in the future.
'The ads appeared in print and on shop windows and were run by Wavequest Pty Ltd (trading as Alice Computers) and Prebeal Pty Ltd (trading as Mobile Phones Etc). Mr Kevin Clerke, a director of both companies has been found to have been directly or indirectly knowingly concerned in or party to the contraventions.'
Consumers who have been affected by the conduct have the option of cancelling their contracts with the provider, One.Tel Pty Limited. One.Tel is writing to those affected customers to formalise this offer. The court also ordered that the legal costs of the ACCC be paid by the traders.
The advertising offered 'free' mobile phones when, in fact, consumers were required to enter into 15 to 18 month contracts with minimum charges from $336 up to $6,300 as a condition of obtaining their 'free' phone.
The Australian Competition and Consumer Commission instituted Federal Court proceedings in Darwin after consumers and businesses complained that the advertising was misleading.
'Traders must be aware that they risk action from the ACCC unless they prominently and clearly disclose the substance and effect of all conditions connected with their promotion,' ACCC Chairman, Professor Allan Fels said today. 'Misleading advertising of this sort adversely affects businesses that stay within the law because consumers are drawn away from ethical businesses by the misrepresentations. ACCC action assists ethical businesses by ensuring that consumers base their choices on accurate information.
'Let this be a warning to the market place that the ACCC will continue to initiate court proceedings where matters cannot be resolved through other means.
'The NT conduct generated more consumer and business complaints to the ACCC in the Northern Territory than any previous matter. The injunctions granted by the court will prevent this conduct being repeated by these traders in the future.
'The ads appeared in print and on shop windows and were run by Wavequest Pty Ltd (trading as Alice Computers) and Prebeal Pty Ltd (trading as Mobile Phones Etc). Mr Kevin Clerke, a director of both companies has been found to have been directly or indirectly knowingly concerned in or party to the contraventions.'
Consumers who have been affected by the conduct have the option of cancelling their contracts with the provider, One.Tel Pty Limited. One.Tel is writing to those affected customers to formalise this offer. The court also ordered that the legal costs of the ACCC be paid by the traders.