False Testimonials
Publishing false testimonials has cost 2 solar panel companies and their director $145,000 (and a contribution to the ACCC’s costs).
The Federal Court today found that Euro Solar and Australian Solar Panel ‘s Youtube video testimonials and the written testimonials published on Euro Solar’s website were not made by genuine customers. Publishing false testimonials breaches the Australian Consumer Law.
This is the first case to be decided by an Australian Court under the Australian Consumer Law’s prohibition against using false testimonials although the ACCC has taken action against other companies in the past requiring them to give Court enforceable Undertakings and to pay infringement notices.
Genuine Testimonials
It’s also important to remember that even if a testimonial is made by a genuine customer, if the customer makes a representation, the company that publishes the testimonial or allows it to remain on its social media pages is taken to be the publisher and is responsible if the statements are false or misleading.
False Country of Origin Claims
As well as a making false testimonials, the companies behind these Solar Panel businesses falsely represented that their Chinese- manufactured solar panels were made in Australia; another breach of the Australian Consumer Law. In some of the ads, the Judge found, they even suggested that because the solar panels were made in Australia that the Australian public should support them.
The power of testimonials and origin claims
Personal testimonials and the desire to support local businesses are strong factors and can sway a buyer when making a purchase, particularly one that involves a product that the buyer may not have a good understanding of, such as solar technology. Consumers will often pay a premium for a product they perceive to be better, or to see the money stay in the country. To engage in this type of deceptive conduct and deliberately mislead consumers in this way not only shows a total disregard for their customers but can damage genuine, honest businesses.
Companies should always consider the impression that their advertisements and promotional material will have on consumers when deciding what to publish and remember that they can be reported to the ACCC by consumers and their competitors and by the ACCC conducting its own investigations.