The telco reseller formerly known as Red Telecom has been hit with penalties of $450,000 for allegedly failing to pay more than $63,000 to seven customers.
Now known as Limni Enterprises, the Australian Communications and Media Authority (ACMA) initiated Federal Court proceedings against the telco reseller in December 2019 over the company’s alleged failure to comply with decisions of the Telecommunications Industry Ombudsman (TIO) to pay more than $63,000 to the customers, which included six businesses and one individual.
Nearly a year later, Red Telecom’s customer base was sold to United Networks (now Hubify) claiming at the time it had acquired the telco reseller for $500,000 in October 2020. After this, it changed its name to Limni Enterprises and went into liquidation.
Proceedings continued however as the Court said there was a strong public interest.
Now, the Federal Court has imposed the $450,000 penalty to Limni, as well as $115,125 against its sole director Nicholas Kontaxis.
During the proceedings, Kontaxis said he thought he could get the TIO decisions overturned “just like when you get a parking ticket, just like you get anything else in life, there is an avenue for appeal,” according to a document of the decision.
“Unfortunately, in this case the TIO is judge, jury and executioner,” Kotanxis added.
While the amounts were paid, ruling judge Justice Perry said Red Telecom “demonstrated a lack of respect” for both the TIO and the affected customers and there was “a culture within the company that was antithetical to compliance”.
Both the ACMA and the TIO welcomed the penalties, with ACMA chair Nerida O’Loughlin saying all telco businesses need to join the TIO scheme and comply with decisions.
“This judgment serves as a reminder to members of the TIO Scheme that there are serious consequences for failing to comply with the TIO Scheme,” she said. “It also makes it clear that directors who are responsible for ancillary contraventions may receive tough penalties, even where the company goes into liquidation.
“The Court has sent a clear message that failing to comply with a TIO decision will result in penalties that provide a clear deterrent.”