Users of Kogan's "unlimited" mobile service had been blocked from recharging their prepaid services because they were said to be using too much data or making too many phone calls in a short time frame.
The prepaid offering to customers, launched in December, includes supposedly unlimited calls, SMS, and MMS, and 6GB of data over either 30, 90, or 165 days on Telstra's 3G network.
But Kogan claims that customers have been blocked from recharging their service because they were in breach of ispOne's acceptable-use policy for using more than 400MB of data in a single day.
Read: When Is "Unlimited" Limited? On Kogan Mobile
Kogan took ispOne to court last week, alleging that the ISP had breached a wholesale agreement previously inked between the two companies.
It also accused the ISP of cutting off or 'flagging' 600 mobile users without first contacting the e-tailer, by restricting them from recharging their service.
Kogan also claims that by the end of March, ispOne had flagged 2000 mobile users, according to an ITNews report.
By early April, the retailer claimed ispOne had flagged a further
The e-tailer owned by Melbournian Ruslan Kogan, alleges the dumping of mobile customers without notice caused "severe reputational demage" to the company, Kogan executive director David Shafer said in an affidavid, reports The Australian.
Kogan Mobile promised to notify any users who are suspected of approaching unreasonable limits, prior to cutting them off.
Hundreds of annoyed Kogan Mobile customers took to Whirpool forum to vent their anger after they were cut off from the "unlimited' mobile service without notice and were reported extensively in the mass media.
One customer asked why "Ruslan Kogan can't just be honest and have the
Gonads to admit that this is a right royal stuff up, and stop blaming
everyone else for kogans incompetence..."
Another wrote: "Wow I
am now really annoyed with myself for signing up with this fraudulent
mob. Didn't know anything about this 400MB daily limit and booting off
the network crap until yesterday"
Last week Kogan won an injunction preventing ispOne from suspending further services. The case will be heard in the Victorian Supreme Court this week.
Ruslan Kogan spruiked the "unlimited" mobile plans launched in late 2012, as the best value in OZ.
"No more running out of credit mid-month, no more complicated fine print tricking you into paying more".