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Excite Mobile fined $455,000 over ‘false, misleading, unconscionable conduct’

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By Steven Raeburn, N/A

December 2, 2013 | 3 min read

Australia’s The Federal Court has ordered Excite Mobile to pay almost half a million dollars for engaging in “false, misleading and unconscionable conduct”, and using “undue coercion” in the sale of its mobile phones and its collection practices.

The company has been fined $455,000

Individual fines totalling $100,000 were also imposed on directors Obie Brown and David Samuel.

The action was raised by the ACCC.

“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,” said ACCC Chairman Rod Sims.

“The penalties imposed on Excite Mobile’s directors, together with the disqualification orders imposed by the Court, signal that individual company directors will also personally be held to account when they are involved in sales and debt collection practices by the company that contravene consumer protection laws.”

Justice Mansfield said in his judgement that a ‘day cap’ included in the charging structure was destined to expose customers to substantial monthly charges, but was presented in such a way that effectively concealed that reality and “directly caused significance loss to individual consumers.”

He said the coercion conduct was the “worst feature” of the debt collection conduct, causing “customers to suffer financial loss and damage...” as well as “non-financial harm such as the stress caused by threats and intimidation.”

The directors have been served with an injunction restraining them from engaging, either directly or indirectly, in similar conduct for a period of seven years, and they have been ordered to pay the ACCC’s costs.

Mobile Phone image via Shutterstock

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