Opposition calls for government assistance for SMEs caught up in telco-scam cases

Opposition business spokesman Bruce Billson has called on the Federal Government to deliver financial assistance for SMEs in court battles against so-called “telco scam” companies, saying early court decisions will deliver stability for future cases.

Billson says the Attorney-General is already considering such measures and that formal applications have already been lodged by some cases awaiting trial.

“The Government should absolutely support this cause, and identify suitable early cases that can be resolved in advance of ACCC action, which would provide clarity for thousands of businesses. There are businesses still being affected by that.”

Billson told SmartCompany today that telco-scam companies have been targeting SMEs for some time, and early Commonwealth support is needed to stop them.

The scams involve small telcos offering phone services to SMEs and convincing business owners to sign up to a service, usually cheaper than their current service. In order to sweeten the deal, they provide offers of free items such as televisions, photocopiers and coffee machines.

“But what happens is that these phone companies sometimes fold, and then the businesses think they have to rearrange their phone services. But then, finance companies appear out of nowhere asking for money for these so-called ‘free items,'” Billson says.

“These finance companies claim this equipment is on a leasing arrangement for very expensive prices. They seek to enforce those arrangements down the track.”

ABC’s Four Corners tonight will report that Macquarie Bank is taking action against small businesses caught up in the scam.

ACCC chairman Graeme Samuel reportedly says on the program that small businesses customers have been tricked into signing finance agreements, which are usually expensive and last for years.

“We’ve found far, far too many – literally hundreds, if not thousands, of small businesses have been caught by these sorts of arrangements,” Samuel says, according to AAP.

Billson welcomes the ACCC action, but also says that assistance should be given to those companies waiting for a court date; some have been told action will not be taken until at least 2013.

“What I’m proposing is that for cases that don’t have a hearing for 18 months, some assistance be given.”

Billson argues Commonwealth assistance should be given to those businesses so law can be established and precedents can be set for businesses involved in court action.

“I’m calling on the Government to make some of the public interest funding available for early cases that will help establish the law.

“I’ve been liaising with a couple of businesses involved in litigation so far, and some assistance would be needed to relieve some of the hardship and stress. I’ve spoken with the Attorney-General, and he is considering the matter.”

“The key thing is to pick suitable early cases, and with these companies running out of resources, it would be a solid effort to keep them going,” Billson says.