Harvey Norman faced ACCC over advertising breach
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.