General photo of an Optus store in Melbourne, Australia, taken on Tuesday, June 19, 2018. Source: AAP Image/Luis Ascui.
One of Australia’s largest telecommunications companies Optus has been fined $10 million by the country’s competition watchdog after charging unknowing customers for games and ringtones.
In a case similar to one faced by Telstra last year, Optus was found by the Federal Court to have misled consumers and breached the Australian Securities and Investments Commission Act (ASIC act) after it charged hundreds of thousands of customers for digital content through its direct carrier billing service (DCB).
This service allows users to make purchases of content such as games and ringtones without having to enter in credit card or bank details, charging it instead to the customer’s bank account.
Optus fell foul of consumer protections and the ASIC actwhen it failed to notify customers DCB was on by default on their accounts, and that they would be billed by Optus for any content bought, even if bought unintentionally.
Additionally, Optus admitted it knew customers were being unintentionally and mistakenly charged for these purchases, from which the telco was making a commission.
“In many cases, Optus customers had no idea they were buying anything, and certainly did not need or want the content for which they were being charged,” Australian Competition and Consumer Commission (ACCC) chair Rod Sims said in a statement.
“Optus failed to take appropriate action, choosing instead to continue to charge customers and collect commissions on these sales, even after numerous complaints.”
The $10 million fine issued by the ACCC is tied for the largest imposed by the courts, with Telstra being fined $10 million last year for similar conduct.
Optus has begun the process of refunding affected customers, with 240,000 customers and third-party providers so far refunded, costing the company an additional $21 million.
Speaking to SmartCompany, commercial lawyer and director at Viridian Lawyers Richard Prangell says the dual $10 million fines to Australia’s largest telcos are a sign the ACCC isn’t playing when it comes to this sort of misconduct.
“They’re actively making an example of the biggest telcos, it’s quite telling,” he says.
“I do think this will have ongoing ramifications and will be a trend as we see consumers become more and more digital. Big business is increasingly able to sneak these fees and charges into their products.”
For SMEs, Prangell says the key to not falling foul of similar misleading conduct is to have any terms disclosed clearly upfront and clearly identify.
“The key is disclosure. If there are fees and penalties associated with your product, make sure your customers are aware of them,” he says.
A Gold Coast-based accountant has been banned from providing financial services for three years after being pinned for failing to act in the best interest of her clients by the corporate regulator.
ASIC has accepted a court enforceable undertaking from Jenan Thorne, director of Saber Group, in relation to advice she provided to clients establishing self-managed super funds (SMSFs).
The regulator cottoned on to Thorne’s business dealings when investigating another firm, Trend Properties Group, deciding to take a closer look when it found she was receiving referrals for SMSF clients.
Following a review, ASIC found Thorne was “inappropriately scoped advice” by excluding insurance and retirement planning when recommending SMSFs to clients.
“Thorne did not adequately stress-test SMSF strategies and had recommended SMSFs to some of her clients despite inadequate evidence to suggest that the strategies would provide increased retirement benefits,” ASIC said in a statement on Tuesday.
It was also alleged Thorne recommended SMSFs to clients without taking their circumstances into account when she was working for SMSF Advice Pty. Ltd. — a wholly owned subsidiary of AMP Limited.
Saber Group contains both a superannuation and accounting practice arm. ASIC also found Thorne was generating revenue from referring clients over to her accounting practice for annual accounts and tax services.
Thorne is banned from providing financial advice until February 13, 2022, and as part of the enforceable undertaking has agreed to inform all her personal advice clients about the case.
“Financial advisers have a legal obligation to provide advice that is in the best interests of their clients, not prioritise their own interests or simply implement client instructions. ASIC will continue to take action when advisers or AFS licensees don’t comply with the law,” ASIC commissioner Danielle Press said in a statement.
The penalty comes amid an ASIC crackdown following the banking royal commission.
Figures published by the corporate regulator yesterday reveal since February 2018 there has been a 15% increase in the number of ASIC enforcement investigations underway.
There has been a 50% increase in enforcement investigations of misconduct by large financial institutions.
For small businesses, an unpaid invoice can turn a profitable month into one where you’re struggling to keep the lights on. On average, Australian supplier invoices are paid 26.4 days late, making them some of the worst payment times in the world, according to a 2017 inquiry into Payment Times and Practices.
Stacey Price is a financial coach at Healthy Business Finances, and she says unpaid invoices can cripple the cashflow of small businesses.
“Most small business owners start their business with limited cashflow and operate on the smell of an oily rag,” Price says.
“One big client not paying on time means business owners need to dip into personal savings to fund the gap.”
So how can small business owners protect themselves against unpaid invoices? Here are a few ways to chase up late payments:
Put it in writing
Make sure your contracts and invoices have clear payment terms in writing from the outset, and you can avoid any ambiguity or confusion when it comes time to be paid.
“Sadly business owners have to prepare for the worst, and terms and conditions or an engagement letter with clear payment terms are a must these days,” says Price.
“Always get these signed by the customer: word of mouth is not enough if push comes to shove. We suggest including a clause that any overdue invoices by 30 days or more will be sent to debt collection and their fees, and commissions and charges will be added to any monies owing.”
Make it simple
Giving clients a simple, straightforward way to pay invoices online can encourage on-time payments, while also helping small business owners keep track of their finances. For Michelle Hargreaves, who owns trade services business That Ladie Tradie, sending online invoices means she can keep track of payments through a mobile app when she’s on-the-go.
“It helps me keep on top of outstanding invoices by reminding me when they become overdue, which is a great reminder for me to follow up,” Hargreaves explains.
Providing clients with a few different ways of paying their invoice might also help. For example, consider how offering your clients the option to use BPAY™ instead of a direct debit or over the phone payment might help you receive payments.
A gentle reminder is typically all that’s needed for clients to pay their invoices. When chasing up late payments, Hargreaves says you should have an open discussion to get to the root of why an invoice hasn’t been paid.
“Often for my business, invoices that aren’t paid are a result of circumstance due to third party factors,” Hargreaves says.
“My typical course of action is sending an email reminder, and I’m pretty lucky because the majority of the time they [clients] pay on the first one.”
Small business owners should send email reminders seven, 14 and 21 days after the invoice due date – this can be automated through most bookkeeping software for convenience. If that doesn’t work, a phone call may be the personal touch needed to get those invoices paid.
“I’ll give clients a call and see if perhaps I’ve got the wrong email address or there has been some other issue. For the most part, a call clears things right up and they pay straight away,” Hargreaves says.
Seek legal help
There are also a number of legal avenues small businesses can explore to recover outstanding debts.
Issuing a formal letter of demand, which acts as a final warning before legal proceedings are commenced;
Filing a statutory demand, which is a formal written request for payment of debts owed, issued under the Corporations Act 2001; and
Bringing court proceedings – this is a final option if all other avenues of debt collection have failed, and should be considered as a last resort.
Explore financing options
For small businesses looking to cover dips in cashflow, there are a number of financing options available. For example, Hargreaves relies on credit cards to pay the bills and keep the lights on while waiting for invoices to be paid.
“I use credit cards to pay for overheads before invoices are settled, and then as soon as the payment comes through I balance it out straight away,” she explains.
Overdue invoices pose a major challenge for Australian small businesses, but by implementing the above good practices, SME owners can minimise their impact on day to day operations and keep their business moving forward.
The origin of the word ‘role’, can be traced back to the 17th-century French word ‘rôle’, which referred to the roll of paper on which the actor’s part was written. Today, we know this as a ‘script’, and its purpose is profoundly important, and yet so simple: to clearly spell out the part that a person was to play in a specific situation.
This was underscored by British director, Alfred Hitchcock, who said: “To make a great film you need three things: the script, the script and the script.”
Whether in a production, or a family business, in order to be a success, defining the roles and responsibilities for each member is crucial in creating a culture of professionalism, personal responsibility and accountability.
While the principle is clear, the practice is sometimes harder to implement. Here are five steps for creating clear roles in your family business.
1. Define it and write it
A role in the context of business is a specific description of what a person has been appointed to do. To expect great results from a person appointed to a role, you first must be clear about what is required of them. Defining a role requires a two-way discussion. Only through dialogue can misperceptions be ironed out so each family member understands clearly how they fit into the business as a whole and what they are accountable for. A written document serves the purpose of capturing this discussion for future reference and performance measurement.
2. Be professional
Given the dynamics of family and work roles, it is easy for conflict to arise. These can stem from overlaps in areas of responsibilities, expectations, and even different approaches to authority. However, a prime source of conflict in family businesses is when one person crosses over the personal boundaries of another.
To avoid this, it is important to engender a culture of professionalism and respect between family members in the workplace. Avoid making comments about the personal life of a family member in the context of the business. Business discussions should be about business and family discussions should be about family. Keep things professional by maintaining a separation between the two.
3. Look out for warning signs
In any family business, there are always warning signs that indicate problems before the negative trend becomes too disruptive to the business. It is always better to act sooner rather than later when these warning signs become visible.
Some examples include:
Conflict over the business, outside of business;
Approval frameworks and company policies being ignored;
Turf wars developing between competing members;
Members absent at key meetings; and
Important decisions being repeatedly deferred.
4. Get expert advice
Navigating the establishment of roles and responsibilities can create tension between family members, especially when these roles have been poorly defined before. Impartial and skilled consultants can help a family business to navigate these tensions by keeping the focus on the business requirements in spite of family dynamics. Experts can also help define accountability and performance metrics so that these are seen to be business imperatives rather than family expectations.
5. Empower people in their roles
In addition to establishing roles and responsibilities, it is also important to empower team members to deliver. Provide training whenever someone is entering a new role so that they have all the tools they need at their disposal to succeed. This also creates a positive atmosphere and demonstrates a commitment to seeing people thrive in the roles they are called to play.
When roles in a family business are not clearly defined and people are left to work them out in an informal way, conflict is bound to follow. But, when the time is taken for a thorough approach to defining roles in terms of business needs, the whole business benefits from an effective and cohesive leadership team.
Under certain circumstances, various intelligence agencies, as well as federal and state police, can request access to your telephone and internet records. This can reveal information about your location and who you talked to, emailed or messaged.
Our research aimed to address this by surveying 100 Australian residents about their views on government surveillance. Just more than half (52) said they accept government surveillance.
The overall strength of acceptance tells a similar story. On a scale from 1 (strongly reject) to 5 (strongly accept) the average response was 3.1. This shows respondents are on the fence, but leaning slightly towards acceptance.
Two main factors influenced acceptance of surveillance.
1. Is surveillance needed?
The most influential factor was if they thought the surveillance necessary.
This has practical implications as lawmakers capitalise on people’s emotional responses to tragic events to justify new legislation, particularly around the time these events occur. For instance, in the six years after 9/11, the Howard government pushed through a new anti-terror statute every 6.7 weeks on average.
More recently, Australia’s attorney-general mentioned the recent terrorist attack in Melbourne to garner support for the new encryption laws:
The need for the powers in this bill has become more urgent in the light of the recent fatal terrorist attack in Melbourne and the subsequent disruption of alleged planning for a mass casualty attack by three individuals last month – also, sadly, in Melbourne. Individuals in both of these cases are known to have used encrypted communications.
People might be more influenced by their general view of the government than their views of specific policies and practices. If so, events that diminish that trust may also threaten the acceptance of surveillance policies. This is something for politicians to consider before calling for the next leadership spill.
Yet, surprisingly, there was no link between people’s level of trust in the way the government manages data and their acceptance of surveillance.
Perhaps people feel they have nothing to hide, or believe the broader benefits of surveillance outweigh the risks.
Cause for concern
Given the vast amounts of information gathered through surveillance, it might seem reasonable to assume that individuals will never be scrutinised unless they raise suspicion (one hopes, reasonably).
However, improvement in data-processing capabilities means this is not necessarily true. For example, artificial intelligence can analyse CCTV video footage without human input.
And when face recognition is used to identify suspects, there are often multiple records of images of people who are a close match to the suspect. This can result in a high error rate, posing a risk that innocent people are accused of criminality and wrongdoing.
But perhaps more worrying is the threat of repurposing — when information collected for one purpose is used for another. For example, concerns that insurance companies could access and use information from My Health Record led to the government amending legislation to prevent this.
It is unacceptable to assume the majority of Australians, who are not criminals and have the expectation to be kept safe by the state, are willing to succumb to heightened surveillance.
However, our findings suggest, at least for now, Australians generally accept government surveillance, albeit relatively weakly. This means that if surveillance continues to increase, people may try to “hide” themselves.
This might be by using virtual private networks (VPNs), privacy protection sufficient to prevent the government from collecting your online metadata.