Australian Mobile Phone Provider Sent 1000s of Fake Debt Collection Letters

Bismillah writes "Excite Mobile in South Australia also set up a fake debt collection agency, and a fictional complaints body for late-paying customers. The company sent fake debt collection letters to 1074 customers, even going so far as threatening to confiscate the toys of their customers' kids if they didn't pay up. From the article: 'South Australian mobile phone provider Excite Mobile has been found guilty of false, misleading and unconscionable conduct by the Federal Court after the ACCC took action against the company for faking a debt collection agency, creating a fictional complaints body, and misrepresenting scope of mobile coverage.'"

Comments

Seize kid's toys?

[bruce_the_loon]

If that doesn't give you an inkling that you're dealing with the same mindset of the people who came up with the Haventree attack shark, then I don't know.

BS

[DoofusOfDeath]

A corporation isn't the only entity that did this. Specific persons employed or contracted by the corporation did.

Prison time.

Re:BS

[Linsaran]

True, but a corporation can only be this evil because there's no specific accountability to the people who own the corporation. Corporations act as a shield for individual liability, that's their only real purpose. If the people who own a corporation were exposed to the same legal and financial risks, they probably wouldn't do half the shit they do.

Re:BS

[neminem]

Put succinctly by Leverage: "If you and I kill a guy, we go to prison. If my *company* kills a guy, pay a fine, that's the cost of doing business."

Re:BS

[doconnor]

I doubt most of the owners knew or approved of this, put specific people who worked for the corporation did. They should be the target of criminal charges. Having them go to jail would be a better deterrent then some financial liability spread among the owners.

Re:BS

[gl4ss]

in most countries in the west(or far-west like australia) performing such fraud actually usually ends up in having the persons who did it tried in criminal court. and end up with limitations on running a business so they have to find someone to act as a shell person for their next fraud. usually it's in a lot smaller scale of course than a telecoms company.

just having shares on something though.. the shareholders should sue the management in this case, I doubt their sec(equivalent) filing included "in the 3rd quarter we will try massive fraud to boost profits".

Re:BS

[Attila Dimedici]

Actually, it is a matter of what happens in court. Actually, in all probability the breakdown will be between middle management and upper management. Obviously these two levels are both going to insist that their trials be separate from each other. Then the middle management will insist that they were following orders and when they questioned the legality they were assured that it had been cleared through legal. There may even be documentation supporting this claim. However, the Upper management will insist, in their separate trials, that that is not what happened at all and whatever documentation there is will be vague enough to at least allow the reasonable belief that it was indeed the middle management acting outside of the knowledge or authorization of upper management. And the problem is that both of these scenarios are believable. Of course, by now this has happened often enough that an alternate scenario is also believable. That upper management told middle management to do it in a manner that was intentionally phrased so as to deny that was what they were telling them while middle management was well aware that what they were doing was illegal.
I was a manager of a retail store that had a significant problem with "shrink" (which in this case was primarily due to shoplifting as a result of the location of the store). Shortly after the manager of a larger store, which had a similar problem, only worse, was fired (for an unrelated reason) my regional manager started to tell me every time she saw me that I was under no circumstances address the "shrink" problem the way that the fired manager had and then she gave me a detailed description of what he did (including how he did it so that corporate accounting would not flag it, which of course raised the question of how she knew he did it). I always assured her that I would never do that (and I never did because I had a strategy for addressing the issue that did not require lying or otherwise falsifying my paperwork. I do not know that my strategy would have worked at the larger store).

Re:BS

[jbresciani]

I doubt most of the owners knew or approved of this, put specific people who worked for the corporation did. They should be the target of criminal charges. Having them go to jail would be a better deterrent then some financial liability spread among the owners.

from the article:

"Excite Mobile directors Obie Brown and David Samuel were also found to have created a fake complaints company"

and

"The ACCC will further seek injunctions, penalties, costs, and a five-year disqualification for Brown and Samuel from operating a company."

Re:FRAUD

[bluefoxlucid]

Yeah, this isn't a problem in America. In other countries, businesses will jockey around the law and do things like this. In America, they change the law first to make it legal, or at least make them legally not culpable (i.e. move the burden of verifying legitimacy on the recipient of debt collection notices).

Verizon

[estitabarnak]

And you thought Verizon was bad...

Re:Verizon

[mjwx]

And you thought Verizon was bad...

Generally our telco's aren't this bad.

Excite Mobile are an MVNO (Mobile Virtual Network Operator) who dont own any infrastructure themselves. Their business model depends on being cheaper than the big 3 (Telstra, Vodafone and Optus) which often leads to having to use questionable business practices to stay in the black... Which is what happened here.

What isn't wrong, is that they sent letters of demand to late paying customers. They had every right to do this, even to use a debt collection agency (after a reasonable time) to recoup the loss. This is fine.

What they did wrong was to set up a fake debt collection agency (deceive customers) and send out threats to confiscate property that did not legally belong to them. Only a court order can order a debtor to hand over their own property to pay a debt and the court does not do this readily.

The second thing they did wrong was to set up another fake company, this time a complaint handling service that had an official sounding name, "Telecommunications Industry Complaints" that was internal to Excite Mobile which again deceived customers. What makes this particularly bad is that "Telecommunications Industry Complaints" sounds very similar to the official government body for regulating the telecommunications industry, the "Telecommunications Industry Ombudsman" who deals with high level complaints about telco's and has real power to hand out fines. So it was a deliberate attempt to mislead customers that an authoritative body was dealing with their complaints when it was not and an attempt to prevent customers from contacting the ombudsman (by confusing them between "complaints" and "ombudsman").

What is good here, is that Excite Mobile was caught and is being punished.

Carriers

[geek]

I'm convinced that phone carriers are the spawn of Satan. The ones in the US aren't any better than this and may in fact be worse on many levels. I've worked for two of them and the shit I've seen still keeps me up at night.

I tend to lean more libertarian but every time I recall my past experiences with these fuckers I start screaming for regulation. Just the fact I pay 3 times what Europeans do for half the service is enough to make me want to hang the bastards from trees and through rocks at them.

Re:Carriers

[neminem]

I recommend looking at Ting. It's really changed the way I think about cell phone providers (namely: because I used to think they were all collectively evil bastards with the primary goal of screwing you, now I only think they *mostly* are that. :p)

Re:Carriers

[ericloewe]

We Europeans had some difficulty to getting to where we are now, it can't be done overnight.

First, you need to list every bureaucrat that should be conveniently sent someplace distant for being too bureaucratic.

Then, you have to build a nice big building and call it "something something Parliament", replacing the temporary text with something catchy and important-sounding.

It helps if they're well paid, but if they start asking for more cash, build a second Parliament in some small town in a region that was feeling left out. Have them rotate between the two buildings every few weeks, taking all the paperwork with them. They'll start asking not to have to do the whole circus every few weeks instead of getting a raise.

Finally, give them the right to legislate on all sorts of issues that will affect nearly everyone (like regulating salt and pepper shakers in restaurants and such petty things), including the right to impose fines on large corporations. While it may seem counterintuitive, bureaucrats are indeed human, according to several doctors I've met (it's scary how some human beings can come up with so many forms...), and being human, they will end up acting more or less like your average person when not inside your fancy megabuck building.
This means they will be pissed off when corporations do evil stuff. Since you gave them the right to legislate on these things, they will take a break from their hobbies (regulating petty things, that is) and direct their attention at said evil corporations.

They will occasionally let out some astonishingly weird decisions (Forcing Microsoft to advertise other browsers is a very unusual decision, with no similar thing ever coming to my mind) and some over the top consumer protection (See Mac Pros needing fan grilles on the inside).
However, they will also be a blessing in many situations (Air passenger rights, limits on roaming charges, privacy,...) and will be worth every buck spent on the whole circus.

Re:Somebody correct me if I'm wrong....

[fuzzyfuzzyfungus]

I'm pretty sure that they can't repossess something for which no money is actually owed unless it was used as collateral for money that can't otherwise be retrieved.

The great thing about really 'downmarket' collections strategies is that you only use them on powerless poor people, so your...creative scope...is considerably broader than it might be under other circumstances.

Re:FRAUD

[interval1066]

Why does this have to get changed to be about America?

Blurred lines

[andersh]

I don't know how it's in the US or Australia but in my Western country the executive(s) are specifically liable for the company's actions.

Especially their own illegal or irresponsible actions - but not limited to their own either. Owners of corporations may in fact also be liable [here], depending on circumstances and ownership. It's far too complicated to go into detail here, I work with the law for a living in my European country.

Re:Blurred lines

[TapeCutter]

The ACCC is Australia's consumer watchdog agency, unlike previous watchdogs they have big enough teeth to do a proper job. They don't just go for small stuff and fraud they also go after the anti-competitive practices used by large corporations, eg: they stopped Apple from making exclusive deals with phone companies and basically told them to sell to everyone or don't sell at all.

Re:FRAUD

[Dishevel]

I think you missed his point.
The point being that Democrat or republican you are just voting for one side a poison pill.
The "One Party System" is that of the Republicats.

Re:Pay them with fake money!

[aiht]

You forgot copied Monopoly money - emphasis on the 'copied', I'm not giving them my real Monopoly money.

Don't hand them evidence of copyright violation!