By Chris Nicholls
SYDNEY: Mobile phone retailer Crazy John’s has agreed to compensate customers who feel they were mislead by the company’s ‘Free’ or “$0’ handset advertising campaign, after action initiated by the Australian Competition and Consumer Commission (ACCC).
The court-enforceable undertaking comes after the ACCC initiated proceedings for unfair trading practices against the company for misleading advertising in mid-January, when it claimed Crazy John’s ‘Free’ handsets were actually paid for through higher call rates than other, non-free handset plans.
The undertaking will give customers on a relevant 24-month contract a monthly credit on phone costs for the life of the contract. All customers on these plans will be sent a notice from Crazy John’s outlining the misleading conduct and informing customers that they should contact Crazy John’s to receive compensation if they feel they have been affected.
Crazy John’s has also undertaken to cease advertising phones in the manner above, implement an ‘extensive’ trade practices law compliance program and pay the ACCC $15,000 in legal costs.
"The consumer compensation that has been obtained, which would not have been available through court orders, demonstrates the strength and flexible nature of the section 87B undertaking regime," said ACCC chairman, Graeme Samuel.
"The ACCC is pleased with the outcome of this matter and acknowledges the co-operation shown by Crazy John’s in quickly removing all misleading advertising materials and offering redress to aggrieved consumers."