Misleading consumers costs Harvey Norman $52,000

A Harvey Norman franchisee has been fined AUD$52,000 for making false or misleading representations about consumer guarantee rights.

Bunavit Pty Ltd, which operates the Harvey Norman Superstore Bundall in Queensland, is the latest of ten Harvey Norman franchisees around the country to be penalised by the Federal Court for breaching consumer protection laws.

The Australian Competition and Consumer Commission (ACCC) brought the action against Bunavit for ten false or misleading statements made by store employees to customers about their statutory rights.

One salesperson told a customer whose new computer was malfunctioning, “There’s nothing we can do.” Another customer who had complained about receiving a faulty laptop was informed, “We can’t help you.”

A store employee told her to contact the laptop manufacturer for help instead and that retailer would not pay for a refund or a replacement. The same employee later advised her that they would pay half of the repair costs if she sent it to a third party computer shop.

ACCC Acting Chair Dr Michael Shaper said, “Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Faulty products must be repaired, replaced or a refund must be provided by the retailer.”

Consumer guarantees cannot be limited by the manufacturer’s warranty and any replacement or repair must be provided at no cost to the consumer.

“Business are expected to take appropriate and effective steps to ensure that their staff understand the rights of consumers and the obligations of businesses under the consumer guarantees provided by the Australian Consumer Law,” Dr Shaper said.

The total amount of penalties levied against Harvey Norman franchisees for false and misleading representations about consumer rights to $286,000.

 Are you up to date with consumer rights and guarantees? Contact us today for more information about our off-the-shelf and bespoke online training on Competition and Consumer Protection and other topics.

Sources: ACCC, TimeBase, Sydney Morning Herald 

ACCC cracks down on misleading ‘drip pricing’ practices

Misleading and deceptive conduct is often thought of in relation to giving false information about prices or processes. But the Australian Competition and Consumer Commission’s (ACCC) recent pursuits of drip pricing practices demonstrates that this conduct can also involve omitting information.

In November, the Federal Court found that Jetstar Airways and Virgin Australian Airlines had engaged in misleading and deceptive conduct and about the price of advertised airfares. The Court will determine penalties against the airlines at a later date.

The ACCC, which successfully brought the case, argued that the two airline companies had misled consumers about the true price of the plane tickets by failing to adequately disclose additional booking and services fees until late into the payment process.

This process – known as ‘drip pricing’ – gives consumers the impression that a product costs lower than it really does. It does so by excluding administrative charges from the product’s nominal sale price. The cost of additional service and handling fees are then revealed after the online transaction process has already commenced.

ACCC Chairman Rod Sims contends that ‘drip pricing’ distorts information and misleads consumers: “[It] can result in consumers paying a higher price than the advertised price, spending more than they realise and making it more difficult to compare offers.”

“The ACCC’s concern with drip pricing has always been to ensure that consumers are not misled and that businesses are not unfairly disadvantaged by misleading practices,” he said.

Earlier this year, the ACCC accepted enforceable undertakings from emerging online companies Airnbnb and Vacaciones eDreams. In these cases, the companies admitted that they had failed to adequately disclose mandatory service and cleaning fees on their online booking platforms.

Airnbnb agreed to establish and maintain a consumer law compliance program within the company, while eDreams submitted that it would ensure its staff received appropriate compliance training on key aspects of Australian consumer law.

Drip pricing was a priority area for the ACCC in 2014 and, as these cases demonstrate, remains a focus for the competition and consumer watchdog.

If your company engages in online sales or multi-stage payment practices it is essential to adequately disclose all relevant pricing information to potential customers.

Contact GRC Solutions today for more information about our competition and consumer law training courses.

Source: ACCC

Homeopathy Plus! vaccine claims were misleading and deceptive: Federal Court

competition and consumer protection laws
A homeopathy company has been found by the Federal Court of Australia to contain statements amounting to misleading and deceptive conduct.

Homeopathy Plus! stated on its website that the whooping cough vaccine was “unreliable at best” and “largely ineffective”. This, the Court found, was misleading and deceptive conduct.

This case shows that false claims made about a competitor’s products can be in breach of Australian consumer law.

The Australian Competition and Consumer Commission (ACCC) takes action on exaggerated claims made by retailers or producers about their own products.

That wasn’t the only thing the Court found misleading and deceptive. It also took issue with the company’s claim that was an adequate foundation of medical science to indicate that homeopathy was an effective alternative to whooping cough vaccination.

The Court found that no such foundation existed, and that vaccination was the only disease prevention treatment approved and accepted by medical practitioners.

Financial penalties and other remedies will be determined by the Court on 4 February 2015.

Misleading and deceptive conduct comes in a variety of practices and affects all firms big and small.

Make sure you don’t misrepresent your products and services, or your competitors’.

Check out our competition and consumer protection law training courses to ensure your business is complying with the law.

Source: ACCC

ACCC updates Australian competition policy

The Australian Competition and Consumer Commission has provided a reinvigorated submission of Australia’s competition policy to the Harper Review.

The submission argues that an effective competition policy is about the following three things:

  1. Microeconomic reforms that open up as many sectors as possible to competition. This allows price mechanisms to play their crucial role in signalling to businesses how to meet consumer’ needs at the lowest cost.
  2. Balanced competition laws, to avoid large efficiency and welfare losses from systematically poor conduct.
  3. Governments that establish and promote the processes and institutions that continually foster competition and sustain the commitment to reform.

Read the full article here.

View the submission here.


Source: ACCC