The ACCC has found that the directors of an online business directory have acted unconscionably by sending misleading documents to its business customers.
Australialink Pty Ltd is a company based on the Gold Coast, which 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.
Action was taken against the company’s director Rachel Dargie and general manager Desmond O’Keefe.
The court found that Australialink, through Dargie and O’Keefe, solicited customers for its directory listing services by sending out a document called a Listing Advice Notice to a number of businesses between January 2006 and June 2008.
The LAN was found to give a misleading impression that businesses had already sought Australiakink’s services or had an existing business relationship with it. Once this LAN was signed, they would be invoiced $195 plus GST.
The court declared that Australialink 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.
The company has been forced to write to each person it invoiced notifying them of the proceedings by the ACCC. In addition injunctions were granted restraining the three respondents from using the documents concerned, that Dargie and O’Keefe attend trade practices training and that respondents pay the ACCC’s costs.
“This is a great result for small businesses that are constantly flooded with unsolicited requests to sign up for directories or advertising,” said acting ACCC chairman, Peter Kell.
“Some companies design these requests to slip under the radar of businesses that don’t realise what they are really signing up for. They are misled into thinking that they have previously requested the product or service or that they will not be charged for confirming their details. Often businesses aren’t aware they have been misled until they receive a bill in the mail.”