Telas Market, a marketplace that allows consumers to buy and sell telas services, has closed its doors for good, following a lengthy investigation by the Australian Competition and Consumer Commission.
In a letter to Telas shareholders, the regulator found the marketplace was a pyramid scheme, and a result of poor compliance by Telas and its directors, which led to the market’s collapse in the second quarter of 2019.
“The conduct of Telas is a result, and not an accident, of its directors not adequately maintaining and protecting the interests of the company,” the regulator said.
“In short, you are looking at a company that is effectively run by a series of people who are not accountable for their actions.”
The company has also been forced to pay a $300,000 penalty for misleading the commission and fined $1 million for failing to comply with the Australian Consumer Law.
A Telas spokesperson said the company was disappointed with the outcome, and it was looking into the implications of the regulator’s findings.
“Telas has been conducting an extensive investigation and is reviewing the findings of the ACCC.
Telas remains committed to the integrity of our business and is working with the ACCC to address any issues it may have,” the spokesperson said.
Telas Market CEO Matthew Liddle said in a statement the marketplace had been run for a long time.
“We’ve been doing it for over 10 years and it’s a good way to sell Telas services and get our customers to use them,” he said.
He said the marketplace would be continuing to operate, with Telas marketing, customer service and website operators continuing to manage it.
“When it was first launched, we were looking to give people a better choice, not only in the telas marketplace but the telos marketplace,” he added.
The Australian Competition & Consumer Commission said it would now be taking steps to review Telas operations.
“There are a number of steps that the ACCCC has identified to be taking in light of the ongoing investigation,” the ACCAC said in its announcement.