3 unwanted letters
I recently wrote about 3 unwanted types of letter a business could receive. To recap, these are letters from:
-a Regulator, for example the ACCC, a State Fair Trading Office, the TGA or Workcover alleging that you or your company has broken the law that the relevant regulator enforces;
– the lawyer acting for owner of a trade mark, copyright, patent or other intellectual property rights alleging that you have contravened their rights and making demands to stop doing so and make amends;
-a letter from your customers, complaining about your goods or the services that they have received from you or your company.
The Regulator’s letter
I only want to look here at the letter from the ACCC, or another Regulator sent after it has received complaints from consumers of your products, complaints from your competitors or after initiating its own investigations.
The ACCC has the role of enforcing the Australian Consumer Law. Most of the clients I have worked with breached the ACL without meaning to and without knowing that they had done so until they received “the letter”. Under the law, intention is not important and ignorance is no defence.
This means that if the product you import, manufacture or sell does not measure up to a mandatory Standard, you will be breaking the law. Recently a number of online sellers and shop retailers were caught selling children’s cots that failed to comply with the Standard. Some of those businesses failed to survive after having to recall the products, put compliance programs in place and with the damage done to their reputations.
Other businesses are caught out with their warranties, such as Fisher and Paykel and Domestic & General who, in January this year were each penalised $200,000 for misleading consumers into the need to buy extended warranties and about their rights to having faulty products repaired, replaced or receiving a refund . They are not alone in not understanding consumers’ rights.
Marketing and product credence claims are also very easy to get wrong and if consumers are misled, the company can be fined and their reputation damaged. Maggie Beer Products found out the hard way last year with consumers believing that their products were all locally sourced in the Barossa, when this wasn’t always the case. Claims need to be looked at from the point of view of what the consumer would understand, not what the seller intends to convey.
Avoiding getting the Regulator’s letter and punishment
Being on the front foot and attacking is always easier, less disruptive to the business and less expensive than having to take defensive and responsive action to the Regulator and comply with their requirements and any Court orders.
This can be as simple as:
-Knowing what the law says.
-Knowing what the law means for your business.
-Working out where in the business things can go pear shaped and conduct a risk assessment and risk treatment analysis.
-Putting processes in place to help stop breaches happening. This may be reviewing warranty cards, reassessing advertising messages and -considering them form the consumers’ point of view or reviewing quality control procedures for manufactured products.
-Making sure the people involved know what to do to avoid things going wrong and what the consequences are if they do.
-Putting checks and balances in place to make sure things are working or, if not, that you find out before the regulator does.
-Having a safe process for whistle-blowers and recourse for those who breach the law.
-Finally, everyone should be on the same page. Complying with the law is not only the responsibility of the staff on the ground, but managers and owners have to fully support a compliance culture.
If this is something that you need help with in your company, contact us and so we can talk about how Ascentia could assist you and your staff.