SoleNet and Sure Telecom are prohibited from carrying on as a business or providing any telecommunications services for a period of two years, the Australian Federal Court ordered on Friday.
In addition, the companies and their director James Harrison have been ordered to pay AU$250,000 in penalties.
As of April 1, 2017, Harrison is also disqualified from managing corporations for three years.
The Australian Competition and Consumer Commission (ACCC) launched Federal Court proceedings against the Harrison Communications, the parent company of SoleNet and Sure Telecom, in April 2016 for breach of Australian Consumer Law.
In December 2016, the companies were found guilty of engaging in unconscionable conduct and undue harassment of customers between 2013 and 2015.
The court said SoleNet and Sure Telecom restructured the businesses to avoid regulatory sanctions and unpaid debts to regulators during the time in question.
Customers were transferred from one company to the other without their knowledge or informed consent, where they were met with unjustified demands for payment of early termination or cancellation fees amounting, in some cases, to harassment.
In delivering his judgment on Friday, Justice Moshinsky said “the contravening conduct was serious, deliberate, and extended over a period of about two to three years” and “was not ad hoc, but systemic and planned”.
“Mr Harrison, the sole director of the companies, was ‘hands-on’ in managing their day-to-day operations and was intimately involved in their conduct,” Moshinsky J added.
The judge also ordered SoleNet/Sure Telecom and Harrison to take reasonable steps to refund customers whose contracts were transferred from one SoleNet/Sure Telecom company to another within 60 days from Friday. ACCC’s costs are to be paid as well.
“The disqualification of Mr Harrison as a director sends a clear message that directors have responsibility to ensure their businesses comply with the Australian Consumer Law,” said Delia Rickard, ACCC deputy chair.