Zen Telecom fined for misrepresenting link to Telstra

Zen Telecom has copped an AU$225,000 fine for cold calling consumers for fixed-line services and claiming to be associated with Telstra.

The Federal Court found that Zen Telecom — which also operates as XLN Telecom, Venus Telecom, Action Telecom, Alpha Talk, and Telko Key — had engaged in misleading and deceptive conduct in telemarketing calls between September 2012 and August 2013. The action was brought to the court by the Australian Competition and Consumer Commission (ACCC).

According to the ACCC, Zen cold called customers to sign up for fixed-line services, and claimed to be associated with Telstra at the first stage of the transaction. ACCC commissioner Sarah Court said that by the time consumers advanced to the second stage of signing up for a service, they may have been misled.

"The ACCC was concerned that by the time consumers progressed to the second stage of the call where they agreed to acquire services from Zen Telecom, they had already been misled by misrepresentations of an association or affiliation with Telstra which had been made during the marketing part of the call," Court said in a statement.

The court also found that Zen breached Australian Consumer Law by failing to provide customers with their contracts within five business days, failing to provide a 10-day cooling-off period, failing to provide notice to cancel the contract, and failure to provide proper details in the customer agreements.

In addition to the fine, the court today ordered Zen to pay the ACCC's costs and publish corrections on its websites and in daily newspapers.