The ACCC has been granted leave by the Federal Court to commence legal proceedings against two companies in liquidation, Beacon Products Pty Ltd (Beacon) and Zandox Group Pty Ltd (Zandox), for alleged unconscionable conduct and misleading or deceptive conduct.
The ACCC is also taking action against the director of Beacon, Mr Warren Skry, alleging he was knowingly concerned in the companies' alleged unconscionable conduct.
The ACCC alleges the companies engaged in unconscionable conduct, including by deceiving customers and exerting undue influence and pressure to make unsolicited sales of printer cartridges and cleaning products to businesses across Australia, in breach of the Australian Consumer Law.
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 had already been made by the business when, in fact, no order had been made.
The companies also allegedly 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. The companies also allegedly falsely represented to some customers that they did not have a right to return or receive refunds for unwanted goods.
The breaches of the Australian Consumer Law alleged in this case relate to systems of conduct or patterns of behaviour that occurred over several years, first commencing in November 2016.
"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."
In one example of the conduct alleged to be in breach of the Australian Consumer Law, 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. 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 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. The ACCC alleges that the business had the right to return and receive a refund for the unordered goods.
The ACCC previously took court action against Mr Skry and his previous company Globex Systems Pty Ltd in 2004 for asserting a right to payment for unsolicited goods and making false representations that businesses had agreed to buy products from Globex when that was not the 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 Mr Skry.
Background
Because Beacon and Zandox are in liquidation, the ACCC was required to obtain leave of the court before commencing proceedings against the companies.
Beacon and Zandox had liquidators appointed on 20 April 2023 following a creditors' voluntary winding up decision.
Beacon was incorporated in 2016, initially selling cleaning products and from January 2020 also selling printer consumables. It predominantly sold these products to businesses through telemarketing calls.
Mr Skry has been a director of Beacon from 6 January 2020.
Zandox was incorporated in late 2022. It is alleged that Zandox was essentially as a rebranding of Beacon, selling the same products.
