The competition watchdog is taking a director and his 11 companies to court for allegedly engaging in unconscionable conduct and harassing customers, including small business owners.
The Australian Competition and Consumer Commission has commenced proceedings in the Federal Court against James Harrison and the corporations he operates.
Referred to by the ACCC as the “Harrison companies”, the group includes 11 companies, including SoleNet and Sure Telecom.
The ACCC alleges companies run by Harrison ceased trading after incurring sanctions from regulators, only to transfer customer contacts to sister companies without the knowledge or consent of the customers.
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The watchdog also alleges Harrison’s companies engaged in undue harassment of transferred customers by seeking cancellation fees it had no contractual right to pursue.
In a statement, ACCC chair Rod Sims said the watchdog has a particular focus on unconscionable conduct in the telecommunications industry.
“The ACCC alleges that the conduct of Mr Harrison and the Harrison companies was, in all the circumstances, unconscionable,” Sims said.
The chair of the Australian Communications and Media Authority has previously described Sure Telecom’s behaviour as “completely unacceptable”.
Christopher Kent, associate at Russell Kennedy lawyers, told SmartCompany the consumer watchdog has the power to go after companies it suspects are harassing customers under Section 50 of Australian Consumer Law.
“It’s not one of the more common sections that’s enforced,” Kent says.
“Normally with these sorts of things you see them [the ACCC] go after misleading and deceptive conduct.
“I think the reason why they went after them for undue harassment, instead of phoenix activity or something like that, is it can be difficult to determine phoenix activity from other types of more legitimate wind-up proceedings.”
Kent says this case shows how regulators aren’t afraid to protect the rights of consumers.
“People need to be mindful of their obligations under Australian Consumer Law, even the less widely used provisions,” he says.
The ACCC will seek declarations, injunctions, redress for consumers, penalties, corrective advertising and costs. The regulator will also seek a disqualification order against Harrison.
A case management conference in relation to this matter is scheduled to be held in Melbourne on April 12.
SmartCompany contacted James Harrison and SoleNet for comment but did not receive a response prior to publication.