Two companies with call centres that preyed on small businesses, pressuring them to buy products they had not ordered, are set to have their day in court.
The Australian Competition and Consumer Commission (ACCC) is set to pursue legal action against Beacon Products and Zandox Group, both in liquidation, for alleged “unconscionable conduct and misleading or deceptive conduct” that breaches the Australian Consumer Law. The conduct includes deceiving customers and exerting undue influence and pressure on them to buy printer cartridges and cleaning products.
Beacon and Zandox allegedly misled business customers into ordering printer cartridges or cleaning products by falsely stating during unsolicited phone calls that they were confirming an order that was made by the business when, in fact, no order had been made.
In one incident, a small business in NSW was sent three deliveries of toner cartridges by Beacon, which the business accepted. A representative of Beacon then contacted the business and requested confirmation of a further delivery of toner cartridges. The business requested that this be the final delivery from Beacon, but Beacon continued to contact the business to confirm subsequent orders. It is alleged there was no agreement in place for the order and payment of goods after the initial three deliveries.
The small business further contacted Beacon, requesting that any future orders be cancelled and, on several occasions, sought to return toner cartridges it did not order or want and sought refunds. Beacon allegedly asserted that the orders were confirmed and authorised by staff of the business, and that they would not take all of the unwanted cartridges back.
In this instance, the ACCC stated that the business concerned had the right to return and receive a refund for the unordered goods.
The two companies have also been alleged to have misled some customers into thinking an initial order was an agreement for an ongoing supply of goods or that the customer did not have the right to terminate an agreement for ongoing supply, when this was not the case. They falsely represented to some customers as well that they did not have a right to return or receive refunds for unwanted goods.
In addition to the two companies, the ACCC is also taking action against the director of Beacon, Warren Skry for his complicity in the alleged unconscionable conduct.
“The alleged conduct by Beacon and Zandox targeted many small and medium businesses, including a retirement village, residential care facility, a childcare centre, and farming businesses, misleading them into accepting orders of products they didn’t want or need, and then making it very difficult to return the unwanted goods,” ACCC Deputy Chair Catriona Lowe said. “We took this action because we were concerned that this type of conduct has the potential to cause financial and emotional stress to business owners and staff.”
The ACCC previously took court action against Skry and his previous company Globex Systems in 2004 for similar anti-consumer conduct.
For this case, the ACCC is seeking declarations and penalties against Beacon and Zandox, as well as pecuniary penalties, declarations, disqualification orders, costs and an injunction against Skry.
Beacon initially sold cleaning products in 2016 then began selling printer consumables in 2020. It predominantly sold these products to businesses through telemarketing calls. Meanwhile, Zandox was alleged to be a rebranding of Beacon, selling the same products.
Because Beacon and Zandox are in liquidation, the ACCC had to obtain leave of the court before commencing proceedings against the companies.
