ACMA Go After ISP Provider

Australia’s regulatory body sets sights on ISP provider Web Ace for alleged fraud on customers’ credit cards

The Australian Communications and Media Authority (ACMA) has used its regulatory powers to help stop fraudulent billing practices by internet service provider, Web Ace. Failure to comply with the Telecommunications Consumer Protections Code C628:2007 (the code) could incur civil penalties of up to $1 million.

Jason Kenneth McKay (trading as Web Ace) has been deducting money from customers’ credit card accounts without their authority. The monies deducted have proved difficult, if not impossible, for customers to recover.

Customers signing up with Web Ace often authorise bill payment through automatic direct debits from credit card accounts on the basis that the money deducted will cover agreed upon amounts for services. What customers did not expect was that Web Ace would take money from their accounts at other times and for different amounts, without their prior knowledge or consent.

The ACMA has found that Web Ace is breaching the code. Under the code a bill must be provided to customers paying non-fixed amounts before an automatic direct debit takes place to allow them an opportunity to view, query or dispute the bill before payment is made. It also requires that direct debits must be in accordance with their authorisation.

‘In issuing this direction, the ACMA has taken enforcement action to ensure that Web Ace’s customers will enjoy the same consumer protections afforded by the code as are available to customers of other telecommunications providers,’ said Chris Chapman, Chairman of the ACMA.

‘The ACMA will use its regulatory powers whenever necessary to enforce compliance with codes registered under Part 6 of the Telecommunications Act 1997, as well as those obligations established by the legislation that governs the industry’.

Web Ace also failed to respond satisfactorily to customer complaints, either by not responding at all or by making promises which it did not keep. Therefore the ACMA directed Web Ace to also comply with complaint handling requirements of the code, which requires that complaints be handled systematically and effectively.