The ACCC reported some big wins last week in the consumer protection space, amounting to 3 companies (and 3 individuals) paying a total of over $1.5 million in penalties.

The ACCC alleged that these companies and people misled consumers, made misrepresentations, engaged in unconscionable conduct and/or failed to comply with consumer protection laws when making unsolicited sales calls.

Any company, in any industry, can be penalised for engaging in conduct that the ACCC considers a breach of the consumer protection provisions of the Australian Consumer Law.

Here are 3 important tips to keep in mind when relating to consumers and avoid breaching the Australian Consumer Law.

It’s not what you mean…

…but how your actions or words are interpreted by consumers that count.

The Bird Farmers

The ACCC considered that by describing birds as “range reared” on packaging and on its website, Game Farm misled consumers that the birds were free to roam. In actual fact, the birds were reared in sheds with no access to the outside. Game Farm paid two infringement notices totalling $20,400 and gave a court enforceable undertaking to the ACCC including implementing a Trade Practices Compliance Program.

Game Farm isn’t the only bird farming and processing company alleged by the ACCC to have misled consumers. Baiada Poultry and Bartter Enterprises were recently ordered by the Federal Court to pay a total of $400,000 in penalties for making misleading free to roam claims, and Luv-a-Duck had to pay $360,000 for similar claims.

It is irrelevant that they did not intend to mislead consumers.

There are Rules for Door-to-Door Selling and Telemarketing

Consumers have a right under the Australian Consumer Law not to be disturbed by telemarketers and door-to-door sales people. The Act sets out strict requirements their conduct including the times that callers can call and the information that must be provided, and the cooling off period of, Unsolicited Consumer Agreements.

The Power Retailers

Anyone who is as tired as I am of the constant barrage of cold callers and door- to -door sales people with their relentless offers of new energy contracts will be pleased to hear that the ACCC has recently taken action against a number of energy retailers, and their marketing reps, in relation to their door- to -door sales practices.

The Federal Court last week ordered Australian Power and Gas to pay $1.1 million because of the conduct of its sales reps and their false or misleading representations, including that:

• APG had approval from, or was affiliated with, the consumer’s existing energy retailer or distributor, or the government; and

• the consumer could receive a certain discount off their energy bill by agreeing to receive supply of retail energy from APG, when APG did not offer such a discount.

APG was also found by the Federal Court to have breached various Unsolicited Consumer Agreement provisions of the Australian Consumer Law.

In actions against other energy retailers, the ACCC instituted proceedings against Origin Energy companies and their marketing company in September in relation to their door-to-door selling practices alleging unconscionable conduct, undue harassment and/or coercion, and making false or misleading representations to consumers when calling at their homes.

In May, two AGL companies were ordered to pay combined penalties of $1.555 million for false and misleading representations and breaches of the Unsolicited Consumer Agreements provisions of the Australian Consumer Law.  Their marketing company was also ordered to pay $200,000 for its role in the conduct.

In March, the ACCC instituted proceedings against EnergyAustralia and four marketing and sales companies engaged by EnergyAustralia in relation to alleged false and misleading conduct during their door-to-door selling practices.

In September 2012, the Federal Court ordered Neighbourhood Energy and its former marketing company to pay total penalties of $1 million for illegal door-to-door selling practices.

Be careful how you collect money…

… this means the directors and staff as well as the company!!

Telecommunications company, Excite Mobile, was ordered to pay penalties totalling $455,000 for engaging in false, misleading and unconscionable conduct as well as using undue coercion in relation to selling mobile phone services and chasing payments.

Two directors were personally liable and penalised $55,000 and $45,000 respectively for their involvement in the conduct and disqualified from managing a company for over two years.

One of the employees was found to be involved in the conduct and ordered to pay a penalty of $3,500.

The judge found that coercion was used to collect debts which caused customers to suffer financial loss and damage as well as non-financial harm such as the stress caused by threats and intimidation.

Excite Mobile falsely represented to customers that mobile phone coverage was available at their home address when it was not. It set up a fictitious complaints- handling organisation and deceived consumers into believing that complaints were being handled by an independent organisation.

Excite Mobile falsely represented to customers that debts alleged to be owed to Excite Mobile had been referred to independent debt collectors and staff used undue coercion to induce customers to pay the debt allegedly owed to Excite Mobile. Excite Mobile also falsely represented to customers that it had rights and remedies available if it instigated legal proceedings against the customer.

The Australian Consumer Law is there to protect consumers. It covers all aspects of a business’ conduct in relating to consumers and a company needs to understand the law applies to its business to protect its customers and protect the businesses from huge penalties and damage to its reputation.

For help understanding how the Australian Consumer Law applies to your company or with your Compliance Program contact Kim Edwards at Ascentia Sustainability. http://www.ascentia.com.au/contact/

For more information on the cases see:  http://www.accc.gov.au/media/media-releases