The Federal Court has ordered Excite Mobile to pay penalties totalling $455,000 for egregious, systematic and deliberate engagement in false, misleading and unconscionable conduct, and using undue coercion in relation to selling and obtaining payment for mobile phone services.
The telecommunication company's directors, Obie Brown and David Samuel have also been ordered to pay $55,000 and $45,000, respectively, for their involvement. The court has also disqualified Brown from managing a corporation for three months, and Samuel for two and a half years.
Fiona Smart, an employee who was also involved in the conduct, was ordered to pay $3500.
According to Australian Competition and Consumer Commission (ACCC) chairman, Rod Sims, "This penalty against Excite Mobile serves as a warning to businesses, particularly small businesses, of the consequences for engaging in false, misleading and unconscionable telemarketing practices, and using undue coercion in relation to debt collection."
In handing down the orders, Justice Mansfield said the conduct intentional in that "the design of the 'day cap' was destined to expose its customers to quite substantial monthly charges, but was presented in such a way that effectively concealed that reality" and "directly caused significant loss to individual consumers."
Justice Mansfield also said the coercion conduct was the "worst feature" of the debt collection conduct, causing "customers to suffer financial loss and damage" and "non-financial harm such as the stress caused by threats and intimidation."
Excite Mobile supplied mobile telco services between October 2008 and mid-2011. The company's conduct was brought to ACCC's attention via the Indigenous Consumer Assistance Network (ICAN), with further assistance provided by the Central Australian Aboriginal Legal Aid Service (CAALAS). The Federal Court found Excite Mobile engaging in this conduct on April 18, 2013.