Unconscionable Conduct and the Gateway to Systematic Financial Crime
When vulnerable trust meets calculated exploitation the consequences and quantums can be devastating to victims.
When vulnerable trust meets calculated exploitation the consequences and quantums can be devastating to victims.
The elderly woman with dementia couldn't remember giving her bank details over the phone. She couldn't recall agreeing to purchase the tablet, the Bluetooth speaker, or any of the other electronics that HouseSmile's sales agents kept calling about. But the calls kept coming, week after week, month after month, for over eighteen months.
Her daughter had explicitly told the company her mother suffered from dementia and couldn't operate a computer. HouseSmile had agreed not to contact her again. Yet the sales agents persisted, using sophisticated psychological manipulation to extract purchases from a woman fundamentally incapable of informed consent.
"You're such a really good customer," they would tell her. "You've paid us really well in the past."
This was a lie. All her previous orders had been cancelled.
By the time Judge Marshall sentenced Tech Vault Enterprises Ltd - trading as HouseSmile - to a $60,000 fine plus $7,500 in emotional harm payments, the company had already placed itself into liquidation. Fifty-one customers were owed nearly $40,000 in unfulfilled orders, victims of what the liquidator described as a "Ponzi operation model" that used new customer deposits to fulfil previous orders rather than maintaining any actual inventory.
