Zen Telecom to pay $225,000 for telemarketing breaches of the ACL

The Federal Court has ordered Zen Telecom Pty Ltd (Zen Telecom) to pay pecuniary penalties of $225,000 for contraventions of the Australian Consumer Law (ACL) following proceedings brought by the Australian Competition and Consumer Commission.

Zen Telecom is a supplier of telephone, broadband, mobile and mobile broadband services across Australia.

The Court declared that Zen Telecom engaged in misleading conduct and made false or misleading representations during telemarketing calls between September 2012 and August 2013 by representing that it was acting on behalf of Telstra or a business or company associated with Telstra, did not have any affiliation or connection to Telstra.

The Court also found that Zen Telecom had breached the unsolicited consumer agreement provisions of the ACL by:

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

Zen Telecom breached laws that are specifically designed to protect consumers from unscrupulous sales tactics in unsolicited marketing,” ACCC Commissioner Sarah Court said.

Zen Telecom’s methodology was to cold-call consumers to promote the sale of fixed line telecommunications services.  During the first “marketing” part of a number of calls, representations were made by Zen Telecom representatives that the call was from a business or company associated with Telstra. This first part of the telemarketing calls was not recorded by Zen Telecom, although the subsequent phase which involved negotiating an agreement was recorded.

“The ACCC was concerned that by the time consumers progressed to the second stage of the call where they agreed to acquire services from Zen Telecom, they had already been misled by misrepresentations of an association or affiliation with Telstra which had been made during the marketing part of the call,” Ms Court said.

The Court ordered Zen Telecom to publish corrective notices on Zen Telecom’s websites and in daily papers across Australia, and to pay the ACCC’s costs.

Zen Telecom also trades as XLN Telecom, Venus Telecom, Action Telecom, Alpha Talk and Telko Key.