Federal Court Orders $230,000 Fine From The Community Network
Monday 16 May 2016 @ 9.23 a.m. | Trade & Commerce
The Federal Court of Australia has ordered payment of penalties totally $230,000 from Multimedia International Services Pty Ltd. The company, which traded as the Community Network, was found in breach of the Australian Consumer Law in its dealings with small businesses. As previously reported, the Australian Competition and Consumer Commission took action against the Community Network for engaging in unconscionable conduct, and making false and misleading representations.
Background
On 30 November 2015, the ACCC instituted proceedings in the Federal Court against Multimedia International Services Pty Ltd trading as The Community Network for allegedly engaging in unconscionable, misleading or deceptive conduct, making false or misleading representations and wrongly accepting payments from small businesses. As we previously wrote:
The Community Network falsely misrepresented that the contract was for a two year fixed term when the actual case was that the business had to give 12 month’s cancellation notice by registered post. Furthermore, the company printed on the front of the contract the location in which the advertising would appear, when terms in fine print on the reverse side allowed The Community Network to change the location unilaterally.
The ACCC further alleged that the Community Network had accepted payments from three other businesses when it had reasonable grounds to believe that it would not be able to provide advertising services for those businesses.
Court Proceedings
The Court found in favour of the ACCC that the Community Network engaged in unconscionable dealings with one small business, including by a failure to release them from their contract for advertising services when those services were not being provided. The Court also found that the Community Network had made false and misleading representations to two other small businesses.
According to the ACCC, the Community Network has provided refunds to the small businesses concerned following the commencement of the proceedings. It has also accepted a court enforceable undertaking to amend its standard form contract and changed other aspects to appease ACCC concerns.
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