Following action by the ACCC, the Federal Court declared that Superfone had contravened the Australian Consumer Law between June 2017 and December 2018 when cold-calling more than 1400 consumers and signing them up to unsolicited new contracts.
Furthermore, Superfone charged termination fees when some of these consumers tried to cancel their contracts.
"Superfone's behaviour was unacceptable. After making unsolicited calls, it misled consumers into entering contracts which the consumers did not want, and did not provide them with information about the ten-day cooling-off period or their rights to terminate the contract," said ACCC deputy chair Delia Rickard.
Concerningly, the court found that Superfone appeared to have targeted vulnerable consumers, or at least it was only successful in securing unsolicited agreements with vulnerable consumers.
The court also declared that Superfone made false or misleading representations to consumers that they were affiliated with the consumer's existing provider, that they were calling to offer discounts or savings on the consumers existing plan and that consumers had no right to a cooling-off period or to terminate their contract
In addition to the financial penalties, the Federal Court ordered Superfone to contact affected customers and tell them that they can exit their agreement without charge. Those who have already paid a termination fee must also be contacted with an offer of a refund.
Superfone admitted liability, but contested the penalty amount and other orders.
"All businesses must comply with the Australian Consumer Law provisions dealing with unsolicited calls and door to door sales, including the ten-day cooling-off period and termination rights. These laws exist to protect consumers when dealing with cold callers, and give them the opportunity to change their minds about a purchase or agreement they have made as a result," said Rickard.
"We will continue to take enforcement action against businesses which contravene the unsolicited consumer agreements provisions."