ACCC: Australialink Misled Consumers

Fed Court said that an online business directory incorporated misleading practices when soliciting for customers.

The Australian Federal court has declared that documents used by a company to solicit customers for its online business directory were likely to mislead businesses receiving them. The company also engaged in conduct likely to mislead or deceive and acted unconscionably in demanding payment for these services.

In the Federal Court, Brisbane last week, the Australian Competition and Consumer Commission (ACCC) obtained orders by consent against Australialink Pty Ltd, its director Rachel Dargie and general manager Desmond O’Keefe.

Australialink publishes a number of online business directories, including the Australian Business Pages Directory. Each year it sends out more than a million directory requests to businesses across Australia.

The court declared that between January 2006 and June 2008, Australialink, through Dargie and O’Keefe, solicited customers for its directory listing services by sending out a document called a “Listing Advice Notice” (LAN) to a number of businesses. The LAN gave the misleading impression that businesses had already sought Australialink’s services or had an existing business relationship with it.  Once businesses signed and returned the LAN they would be invoiced $195 plus GST.

The court also declared that Australialink, along with Ms Dargie and Mr O’Keefe, acted unconscionably and with a lack of good faith towards businesses by intentionally misrepresenting that it had instituted, or was in the process of instituting, court proceedings against those businesses that had been invoiced for the listing but had not paid.

Australialink has been ordered to write to each person it invoiced between January 1 2007 and December 3 2008, notifying them of the proceedings brought by the ACCC, outlining the court’s findings and advising that they may have a private right of action to seek compensation if they consider they have suffered loss as a result of Australialink’s conduct.

In addition, the court:

  • granted injunctions restraining the three respondents from using the documents concerned or being involved in similar conduct for a period of seven years
  • ordered that Dargie and O’Keefe attend trade practices training,
  • and ordered that the respondents pay the ACCC’s costs.

The granting of injunctions follows on from undertakings given to the court in December by Australialink.  The company undertook to cease using the document used to represent that it had commenced or was in the process of commencing legal proceedings, and to alter the wording used in the LANs.