ACCC takes action against Zen Telecom for misleading telemarketing

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Zen Telecom Pty Ltd (Zen Telecom) for alleged contraventions of the Australian Consumer Law (ACL) in relation to its unsolicited telemarketing practices.

Zen Telecom is a supplier of telephone, broadband, mobile and mobile broadband services across Australia and trades as XLN Telecom, Venus Telecom, Action Telecom, Alpha Talk and Telko Key.

The ACCC alleges that Zen Telecom, through marketing companies engaged to telemarket Zen’s services, made false, misleading or deceptive representations during unsolicited calls to consumers by representing that they were acting on behalf of Telstra or a business or company associated with Telstra.

The ACCC also alleges that Zen Telecom breached the unsolicited consumer agreement (UCA) provisions of the ACL.

“The unsolicited consumer agreement provisions were specifically designed to protect consumers during unsolicited marketing transactions where they’re not expecting to be contacted and are off guard,” ACCC Chairman Rod Sims said.

“Companies are free to market their services, including by telemarketing, so long as they present consumers with accurate information and comply with their obligations under the Australian Consumer Law.  Businesses should expect the ACCC to investigate when we become aware of telemarketing practices that appear to mislead consumers or to breach the unsolicited consumer agreement provisions,” Mr Sims said.

The alleged breaches of the UCA provisions include that Zen Telecom:

  • failed to provide consumers with a copy of their contract within 5 business days;
  • failed to provide consumers with an agreement that clearly stated Zen Telecom’s address and informed consumers of their cooling off rights;
  • failed to provide consumers with a notice to cancel the contract; and
  • supplied services to consumers during the 10 day cooling off period.

The ACCC is seeking pecuniary penalties, declarations, injunctions, an order for corrective notices, an order for Zen Telecom to establish and implement compliance programmes and costs.

The matter is listed for a directions hearing on in Perth on 28 March 2014.