Tag Archives: australian competition and consumer commission

ACCC launches consumer rights awareness campaign

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The Australian Competition and Consumer Commission (ACCC) kicks off a consumer rights media campaign today aimed at correcting widespread confusion among consumers about what to do when a product or service they buy turns out to be not quite right.

90% of consumers are confused about what to do with a faulty or incorrectly-advertised purchase, says the ACCC, and the campaign is a direct response to these figures found in the ‘Australian Consumer Survey 2011′.

Australia-wide ‘Consumer Guarantees’ lie within Australian Consumer Law, and apply to products and services whether they be online, in store, second-hand, or on sale. “We now have a single national law so that no matter where you shop in Australia you have the same rights to a repair, replacement or refund for a faulty product or unsatisfactory service,” says ACCC chair, Rod Sims.

“If products don’t work as promised or don’t work at all you have rights as a consumer regardless of whether you bought it online, in a shop, full-price or on sale.”

On the other side of the counter, almost a quarter (24%) of businesses have no understanding of their post-purchase obligations, and only 13% are aware they must honour guarantees and warranties.

The media campaign launched today, ‘Repair, replace, refund’, will include radio and online advertising directing consumers and businesses to australia.gov.au/consumerrights to find out more information about their rights and obligations, and to advise when a repair, replacement or refund is appropriate.

An ACCC spokesperson tells Marketing this is its first radio campaign the ACCC has run for quite some time, and the first time radio has been coupled with online.

As well as running on mainstream metro and regional radio stations, the radio ads will include specific targeting to people from non-English speaking backgrounds. For example, ads in Cantonese and Greek will run on radio stations in those languages, among others. Additionally, indigenous Australians will be targeted through SBS National.

The web advertising will run on popular online shopping sites such as eBay and Lassoo, as well as price comparison sites.

Big W pays $400,000 for childrens clothing breach

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Large letter retailer Big W has made a deal with the Australian Competition and Consumer Commission (ACCC) after it was found it had breached aspects of the ‘children’s nightwear code’.

Big W will make a contribution of $200,000 to the Sydney Children’s Hospital in Randwick and $200,000 to a major research program into the mandatory safety standard, following a major recall of children’s nightwear by its parent company Woolworths Limited and supplier Vinetex & Co.

According to the ACCC, the company was investigated for children’s nightwear that had incorrect warning tags labelled as ‘low fire danger’, when flammability testing showed they should have been labelled ‘high fire danger’.

After being advised of the breach, Woolworths acted promptly and undertook a voluntary recall across dozens of styles across its nightwear range, including 19 styles from the Pink Sugar and Bed Bugs Girls Single Nighties range and eight styles from the Selected Sleepwear Nite Club Boys Nightwear range.

“Although there has been a significant reduction in hospitalisation rates due to burns from nightwear since the late 1970s, when the standard was introduced, burns from nightwear can and still do occur. There is considerable research which shows that clear labelling helps minimise the risk of these injuries, which is why the ACCC regularly monitors compliance,” ACCC deputy chair Peter Kell said.

“Suppliers and retailers alike should be particularly vigilant when selling products that are subject to mandatory safety standards. Care needs to be taken in checking the details contained in test reports to ensure products meet all requirements. Keeping consumers safe should be the top priority.”

Microsoft and Yahoo! given all-clear

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The Australian Competition and Consumer Commission (ACCC) have given a major Microsoft and Yahoo! deal the green light.

Under the terms, Microsoft will acquire exclusive license to Yahoo! search technologies for the next decade. Yahoo!’s existing technology will be integrated into Microsoft’s Bing engine: essentially Bing will power Yahoo!’s search engine. Additionally Yahoo! will become the exclusive worldwide relationship sales force for both company’s top-tier search advertisers.

The ACCC scrutinised the competitive effect this would have on national markets regarding the supply of paid search advertising and search syndication services. It found the agreement was unlikely to lessen competition substantially.

Microsoft and Yahoo! said in a joint statement:

“We continue to believe that this deal will create a true, competitive alternative in the marketplace that will benefit consumers, advertisers and publishers. We remain hopeful that the agreement will close in early 2010.”

In a wider context, Microsoft’s alliances are growing.

Snooze admits to misleading advertising

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Retailer Snooze has admitted it ran a misleading advertising campaign in October 2008.

The retailer admitted the campaign was likely to mislead or deceive customers about the savings they would obtain. The campaign used ‘two-price’ advertising in the form of ‘Was/Now’.

The Australian Competition and Consumer Commission (ACCC) found, through a proactive audit, that Snooze had sold its products at a lower price than the reported ‘Was’. Snooze admitted the ‘Was’ prices were referenced to their internal recommended retail prices, rather than the price the products were offered and sold at. This amounts to a breach in the Trade Practices Act 1974.

Two-price advertising can make a sale price seem more attractive to consumers, but where the was price is false or inflated, customers can be misled. Such advertising places businesses at serious risk of breaking the law. An advertised higher price must be genuine and have applied prior to the sale for a reasonable period of time, said Graeme Samuel, ACCC chairman.

Snooze will write an apology letter to any customers known to have purchased a product during the period and offer a $50 gift voucher.

Deceptive practices slammed by ACCC

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In a case brought by the Australian Competition and Consumer Commission (ACCC), the Federal Court has declared Australialink acted unconscionably and engaged in conduct likely to mislead or deceive businesses.

Australialink, a Gold Coast publisher of several online business directories, deceptively targeted SMEs with its service. It sent businesses ‘Listing Advice Notices’ which gave the impression the businesses had sought the services of, or had an existing relationship with, Australialink. If businesses signed the notice, they’d be invoiced for $195, plus GST. The company sent out more than a million directory requests per year.

The Federal Court found that the documents were likely to mislead businesses and that the company acted unconscionably in demanding payment for these services. The court also declared the company, director Rachel Dargie and general manager Desmond O’Keefe had acted unconscionably by intentionally misrepresenting that it had instituted court proceedings against businesses that had not paid the unsolicited invoice.

Some companies design these requests to slip under the radar of businesses that dont realise what they are really signing up for. They are misled into thinking that they have previously requested the product or service or that they will not be charged for confirming their details. Often businesses arent aware they have been misled until they receive a bill in the mail, said Peter Kell, acting ACCC chairman.

This is a great result for small businesses that are constantly flooded with unsolicited requests to sign up for directories or advertising.

Telcos bow to ACCC pressure

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Telecommunications industry leaders Telstra, Vodafone Hutchison (operating under the Vodafone, 3 and Crazy John’s brands) and Optus (also on behalf of Virgin Mobile) have indicated to the Australian Competition and Consumer Commission (ACCC) that they will improve their advertising practices so that consumers are better informed about the products and services they offer.

The announcement is part of an effort launched by the ACCC earlier this year to clean up telecommunications advertising.

In announcing the acceptance of the undertaking, ACCC chairman Graeme Samuel asserted, “Having the three major carriers on board is a critical step and the management of the major companies should be applauded for taking a stand. The broader telecommunications industry has for some time walked a fine line between compliant and non-compliant advertising.”

The ACCC pointed to 12 of the most prevalent types of misleading conduct made by telcos, with the three industry leaders stressing that their advertising will not make these claims in circumstances where they are likely to be misleading to consumers.

Some of the poor practices the agreement covers include:

  • Use of terms such as ‘free’, ‘unlimited’, ‘no exceptions’, ‘no exclusions’ or ‘no catches’ when this is not the case
  • Headline price offers in the form of ‘price per minute’ for mobile phones and phone cards when there are other fees/charges which are not clearly disclosed, and
  • Headline claims relating to price, data allowances, total time allowances, speeds and network coverage where the claims cannot generally be sustained for all consumers.

“The ultimate test will come as future behaviour in the market is monitored and I remind all companies involved in telecommunications that the ACCC will continue its vigilant monitoring of their advertising practices, and will without hesitation take legal action to deal with any further flouting of the law,” Samuel said.

Harvey Norman faced ACCC over advertising breach

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The Australian Competition and Consumer Commission has released details of action taken against the electronics wing of Harvey Norman, following evidence that the company breached the Trade Practices Act.

The ACCC took action in 2002 against three companies in the Harvey Norman group, two Harvey Norman corporate group individuals and 15 Harvey Norman franchisees suggesting ‘bait’ advertising and misleading or deceptive conduct.

It was alleged that in the period before the introduction of the GST, national catalogue, television and radio advertising was conducted for Harvey Norman Computers and Communications franchise stores which featured a promotion for GST-ready accounting software, Quicken Quickbooks, for $199 that included a bonus software bundle valued at over $900.

This is despite that when the Quicken Quickbooks promotion was advertised, the Harvey Norman stores in question were aware that none of the bonus software bundle was available or was available in insufficient quantities to meet consumer demand.

The ACCC also indicated that the same advertising misled consumers in relation to the eligibility for GST-related taxation benefits on purchases of digital cameras and ‘approval’ of goods for GST start-up assistance from the Federal Government.

Derni Pty Ltd, a subsidiary of Harvey Norman Holdings Ltd, acknowledged the charges made by the Federal Court that it had made misleading or deceptive representations in advertising the Quicken Quickbooks promotion for the benefit of Harvey Norman stores.

ACCC Chairman Graeme Samuel said Harvey Norman now recognised the necessity that an organisation such as it, must have better procedures to avoid breaches of the Act.

“This particularly relates to misleading and deceptive conduct that is so harmful to consumers. Harvey Norman has expressed a willingness to improve on its past relationship with the ACCC. We look forward to Harvey Norman taking positive steps in this context,” said Samuel.

Harvey Norman said it would work with the ACCC’s requirements and that it would continue to review its trade practices compliance program with the assistance of an independent professional.

PMP changes tact as ACCC makes ruling

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PMP Limited’s CEO, Richard Allely, has detailed a ‘transformation’ plan that will ‘re-energise’ the company and position it for an improvement in market conditions.

Allely, who was only made CEO recently, has told the Australian Stock Exchange that phase one changes driven by volume declines resulting from the economic downturn, had already delivered short-term savings of $26 million .

“Phase one of the transformation is a swift and decisive response to the changing shape of the print market, which has seen a fall in print volumes and increased competitive rivalry…Our aim is to make the business much less complex and hence a much lower cost producer at a time when volumes are in decline in order to underpin and drive substantially improved earnings when the market improves,” Allely said.

This follows a ruling by the Australian Competition and Consumer Commission (ACCC) that the company provided ‘some of its customers with reports that included incorrect pamphlet delivery statistics’.

PMP Distribution (part of PMP Limited) delivers advertising material, publications and product samples to Australian households through a network of distributors and deliverers, known as ‘walkers’, who deliver materials by hand to letterboxes.

“During 2007 and 2008 PMP Distribution, a wholly owned subsidiary of PMP Limited, provided some of its customers with reports that included incorrect pamphlet delivery statistics – claiming deliveries had taken place in certain areas when they had not. The irregularity came to light as a result of an internal audit by PMP Distribution. When it discovered the problem, it contacted affected customers and approached the ACCC to resolve any Trade Practices Act concerns,” ACCC chairman Graeme Samuel said.

PMP released a statement welcoming the ACCC announcement, pointing out that it voluntarily alerted the ACCC of the issue when it first came to light in November 2008 following an internal audit, and kept the ACCC fully informed throughout its subsequent internal review process.

The ACCC said that it recognised all undertakings have been implemented and believed no further action needed to be taken.

New ACCC pricing requirements for ads

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The Australian Competition and Consumer Commission (ACCC) has released information to help business and consumers to understand the ‘Clarity in pricing’ amendments to the Trade Practices Act 1974.

The amendments require businesses who choose to advertise a part of the price of a particular product or service, to also provide a single figure that reflects the total price to be paid.

“The new law will not only mean consumers have accurate price information, but also that businesses have a more level playing field on which to compete when it comes to price representations,” says Graeme Samuel, the ACCC’s chairman.

Guidance material has been specifically designed for the motor vehicle and tourism sectors, which according to the ACCC are “frequently use component pricing in advertising”.

This means that a motor vehicle advertisement can no longer show the price of the vehicle ‘plus on-road costs’.

In addition to its industry-specific material, the ACCC has produced a general guide, News for Business – Component Price Advertising, to explain the new provision and its application across all industries.

“Under the current law a business that does the right thing by consumers and shows the total price they can expect to pay, may be disadvantaged if a competitor elects to feature only one part of the total price, along with a disclaimer or advice that other amounts (like statutory charges) will also be imposed. That will not be the case after 25 May,” explains Samuel.

ACCC approves T&Cs for digital radio

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The Australian Competition and Consumer Commission (ACCC) has finalised the access undertakings that set out the terms and conditions that will apply to digital radio broadcasters and service providers.

This concludes 18 months of consultation by the ACCC with industry and other stakeholders, with the next step up to the Australian Communications and Media Authority (ACMA) to declare a final date for services to begin.

Digital radio services have been set to commence in Adelaide, Brisbane, Melbourne, Perth and Sydney no later than 1 July this year.

Legislation introduced by the federal government is allowing the ACMA to allocate eight licences to commercial and community broadcasters to provide digital radio.

According to the legislation, the licensees will be ‘responsible for multiplexing together the separate streams of content from individual broadcasters and transmitting a combined stream to end users in each licence area’.

This includes a ‘regime’ to allow broadcasters to receive access to digital radio transmission services on reasonable terms and conditions, with each licensee being required to provide the ACCC with a copy of the terms and conditions.

Once approved by the ACCC, it is up to ACMA to decide if digital radio services can start in that area.

At this stage eight companies have made applications for digital radio licences through industry body Commercial Radio Australia.

Telcos must raise standards or face action, says ACCC

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The telecommunications industry must raise its standards in its treatment of consumers or risk increased Australian Competition and Consumer Commission (ACCC) scrutiny and action, the Commission’s chairman, Graeme Samuel, has warned.

He points to problems such as misleading advertising, unfair contracts and deceptive mobile phone competitions that have been allowed to proliferate by service providers, publishers and carriers, who have turned a blind eye while taking a slice of the profits.

“It is no longer acceptable for carriers to wash their hands of responsibility as operators use their networks to entrap phone company customers with unwanted, expensive and difficult to unwind subscription services,” explains Samuel.

Samuel indicates that the ACCC expects carriers to adopt rigorous standards and procedures in plain language means closing off access to their mobile networks for rogue operators.

Consumer protection issues in telecommunications consistently ranked number one as the sectors most complained about to the ACCC Infocentre, with more than 4000 complaints a year, ranging over a number of types of operators, conduct and telecommunications products and services

The provision of telecommunications services is so important to society and the Australian economy, says Samuel, and consumers should be able to trust their providers, receive high quality customer service and be accurately informed about products and services.

Other concerns included advertising practices, consumers not understanding contracts, including inadvertently signing up to a subscription service, and difficulties with unsubscribing and the complaints handling process.

“The ACCC is drawing a line in the sand – we’re saying to the poor performers, and there are many of them, mend your ways,” asserts Samuel.

ACCC action on mobile ads in teen mags

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Are you sick of your teenage kids getting ripped off by overseas mobile companies offering expensive applications? So is consumer watchdog the Australian Competition and Consumer Commission (ACCC).

The Commission has launched legal action against two overseas-based companies for alleged misleading advertising of mobile telephone premium services in Australian teen magazines, costing the teens or their parents a lot of money by unwittingly signing up to the services.

The ACCC is concerned that the companies’ advertising does not adequately disclose the nature of the services being offered and their costs, and is particularly worried that consumers responding to the ads could unknowingly subscribe to high-cost, ongoing service when they think they are simply completing a one-off purchase of a ring tone or wallpaper.

The two companies – AMV Holdings fro Britain and Bulgaria’s Teracomm – are the subject of the legal action under the Trade Practices Act.

Graeme Samuel, ACCC chairman, believes that advertisers must not rely on minute fine print to disclose important terms and conditions.

“The costs and nature of the services must be prominently and clearly identifiable within the advertisement, particularly when it is targeting young people,” explains Samuel.

The ACCC has also obtained enforceable undertakings from magazine publishers Pacific Magazines (the publisher of Girlfriend and TV Hits) and ACP Magazines (the publisher of Dolly, Cosmopolitan and Cleo) to improve the overall standard of advertising for mobile premium services.