The Australian Competition and Consumer Commission has instituted class action proceedings against Allphones Retail Pty Ltd, on behalf of its franchisees, for a series of unconscionable activities carried out by the retailer.
According to the ACCC, action has been taken against the company and three individuals and is seeking damages on behalf of 74 eligible current and former Allphones franchisees.
The individual respondents are Allphones’ director and CEO, Matthew Donnellan; director and COO, Tony Baker; and national franchising manager, Ian Harkin.
The ACCC alleges that Allphones breached section 51AC of the Trade Practices Act 1974 and lists its offenses as:
– Receiving commission or bonus payments from telecommunications networks which were not paid to franchisees in accordance with franchise agreements.
– Received rebates from mobile phone handset and other product suppliers which were not paid to franchisees in accordance with their agreements.
– Made unilateral deductions from commission payments payable to franchisees which were not permitted by their agreements.
Under the class action, the ACCC is seeking damages for losses sustained by the represented franchisees.
This is not the first time Allphones has come under scrutiny from the ACCC, previous altercations have also taken place in March and October 2008, where the company allegedly breached sections 51AC, 51AD, 52 and 59 of the Act. These specific sections are in reference to unconscionable conduct, contravention of an industry code, misleading conduct and misleading representations about certain business activities.
Proceedings for the class action is set for directions hearing on 8 September 2009 before Justice Foster.
UPDATE: In addition to this, the ACCC has filed further charges against Allphones, Click here for the full story