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WARNING: Telecommunications scam has exceeded 1000 victims Australia- wide.
We’ve been approached by hundreds of clients where their factual scenarios are eerily similar.
“Sign up with our phone company- you’ll get cheaper monthly phone bills and we’ll throw in a free phone system, mobile phones and a new plasma screen TV!” – How could you resist?
Small businesses and corporate individuals have been approached by sales representatives that offer “telephony bundled deals” comprising telecommunication services and equipment rental agreements. Essentially, this sales technique and subsequent business plan has led to thousands of consumers who have been misled, ripped off and in some cases, driven to insolvency. As a consumer, you may be drawn towards a deal that gives you free electronic goods – in principal there is nothing wrong with this. In practice, it’s likely that you’ve been scammed.
The basic pattern of victims who have signed up to the “telephony bundled deals” is that they were led to believe via verbal assurance and written contractual agreements that they would only be paying for the telephone service and that the equipment provided would be ‘free’ or provided as an incentive to sign up. When signing up for the telephone services, within the fine print of the contracts, consumers were signing up for and providing a personal guarantee on behalf of their businesses, for equipment finance agreements at exorbitant prices.
Generally, the terms of the contract (represented this way to the client at least) included: $1500.0 per month (often the payments were much more than this) for a term of 60 months, with an offer to buy the equipment back for $1.00 at the completion of the term. Shortly after the client’s were signed up, the company would basically cease to function as a telecom provider and the customers would be stuck with the finance agreement monthly payments and have to go back to their old telecom provider!
Consumers were no longer dealing with the telecommunication company nor were they getting the service that they signed up for but still had a continuing financial rental arrangement with a finance company that they knew nothing about.
Finance companies used by one of the telecommunication companies (now either deregistered or under external administration) include:
- Link solutions Pty Ltd
- Service LS Pty Ltd
- Axis Telecoms Pty Ltd
- Sonofon Pty Ltd
- Service So Pty Ltd
- Telecom One Pty Ltd
- Service TO Pty Ltd
- WorldTel Corporation (Victoria) Pty Ltd
- Skylink Communications Pty Ltd
- Queensland Communications Company Pty Ltd
- Service QCC Pty Ltd
- Australian Integrated Finance Pty Ltd
- Clear Communications
- National Telecoms Group Pty Ltd
- Clear Telecoms (Aust) Pty Ltd
Our 100% success rate:
Since becoming aware of the Quikfund scam, we have taken timely and immediate measures to protect our clients, and those in a similar position from facing individual Court proceedings, having default judgment entered against them, damaged credit ratings and even bankruptcy threats.
In 2012, Attwood Marshall Lawyers commenced three test cases in the Federal Court of Australia on behalf of a class of victims who essentially, were induced to enter the ‘telephony bundled deals’ as a result of misleading or deceptive conduct on the part of the Quikfund sales representatives.
The three test cases:
By way of summary, the three test cases that were heard together in the Federal Court of Australia, all raised the same issues of statutory construction and involve similar facts. In 2007, 2008 and 2009, each of the three respondents entered into ‘rental agreements’ with the appellants: Quikfund and Enterprise Financial Solutions (“EFS”). The obligations of the respondents, under the respective agreements were personally guaranteed by their directors.
We argued that the respondents were induced to enter into the rental agreements by misleading or deceptive conduct on the part of sales agents or third party companies that supplied the ‘free’ office or electronic equipment. That conduct included the false and misrepresentations that the office or electronic equipment would be provided for free if the respondents would sign up there and then for contracts relating to the supply of telephone services.
Eventually, the three respondents defaulted under the terms of the rental agreements and were sued for damages for breach of Contract. Quikfund/EFS also sued the directors of the respondent companies for the personal guarantees and indemnities given under the Contract.
In response to the claims against them, the respondents claimed that Quikfund/EFS were alleged to be liable to them under s52 of the Trade Practices Act 1974 (“TPA”) as a result of misleading or deceptive conduct of the sales agents or the third party equipment suppliers because they were ‘linked credit providers’ for the purposes of s 73 of the TPA, therefore jointly and severally liable under that section for the misrepresentations of the equipment suppliers.
In essence, Quikfund/EFS’s arguments were rejected by the Full Federal Court and the application was dismissed with an Order that Quikfund and EFS pay our clients’ costs.
Quikfund and EFS sought to obtain ‘special leave’ from the High Court to appeal against the decision of the full Court of the Federal Court in favour of the respondents (our clients). The High Court rejected and dismissed Quikfund/EFS’s application with an order that Quikfund and EFS pay our clients’ costs expended in the Federal Court, the Full Court and the High Court.
If you are facing the same threat:
Legal proceedings and threats to pursue legal action will not disappear! It is crucial to not ignore legal proceedings and instruct you solicitors immediately if ever issued with a Statement of Claim.
Our expert knowledge and involvement with Quikfund/EFS over the last 5 years means that we have the resources, and precedential law to defend claims against individuals in the same position as those in the three test cases
We’re taking enquiries now; please contact our Commercial Litigation Department if you require advice or legal representation.
Department Manager, Amanda Heather:
Ph. 07 5506 8245
OR FREECALL 1800 621 071
For those reading, take caution:
Attwood Marshall Lawyers urge small businesses and corporate individuals to reject and steer clear when approached by sales agents offering ‘telephony bundled deals’ or business models of the like. Read the fine print carefully before you sign on the dotted line and understand the risk and responsibility of signing as guarantor to any form of Contract. That old adage is a good one ‘don’t sign anything until you get good legal advice!’