Snapshot: recent consumer law enforcement activity


Posted By on 25/10/15 at 1:57 PM

Here’s a snapshot of what the ACCC has been up to recently.

ACCC v AGL South Australia – the judgement

In an earlier blog, we mentioned that the ACCC successfully prosecuted AGL South Australia regarding misleading representations about discounts on its energy plans. To briefly recap, consumers entered into a discounted plan with AGL, which then increased the rates during the contract term. AGL falsely stated that consumers would continue to enjoy the same level of discount.

In April, the Federal Court fined AGL South Australia $700,000, ordered it to refund approximately $780,000 to 23,000 customers, publish a corrective notice in The Advertiser and pay $300,000 towards the ACCC’s costs. Ouch.

Electronic Bazaar zapping consumers’ rights

Electronic Bazaar was an online retailer of camcorders, digital cameras, mobile phones, laptops, projectors and other electronic goods. The ACCC issued proceedings alleging that Electronic Bazaar told consumers they were not entitled to a refund, repair or exchange where the product was no longer under an express warranty, was not in its original packaging, or where the claim was made outside a specified claim period. If that wasn’t enough, on four separate occasions between June 2012 and July 2014, the business accepted payment for goods but failed to supply them within a specified or reasonable timeframe.

In May 2015, the Federal Court found in favour of the ACCC, and fined Electronic Bazaar $100,000, banned the sole proprietor (Dhruv Chopra) from engaging in similar conduct for a period of 5 years, ordered Mr Chopra to undertake training on his obligations under the ACL, and pay the ACCC’s legal costs. This is a significant judgement against a sole trader.

Following this decision, the business’ website was closed down. It’s unclear if the business has ceased trading.

Supabarn and The Real Juice Co … juicy stuff

Supabarn Supermarkets Pty Ltd and The Real Juice Company Pty Ltd have each paid $20,400 (on infringement notices) regarding misrepresentations on private label juice products. The action centred on claims made regarding private label 2 litre apple juice and 2 litre cranberry juice products, manufactured by The Real Juice Co and sold by Supabarn between January 2014 and March 2015. The apple juice product label claimed “It’s produced locally using the freshest quality apples”, “Straight from a farm”, and “Made in Griffith.” As lovely as all that sounds, the truth was somewhat different – the product was actually made from reconstituted juice concentrate imported from China. The cranberry juice product label included the words “No added sugar; no artificial flavours; no artificial colours; no preservatives”, “So if you like your juice fresh with nothing else added”, and “It’s really just fruit juice!”. The truth? The product contained various additives, as well as added sugar.

Supabarn_apple_cranberry

Note that the acceptance of infringement notices is not an admission of wrongdoing. They are a tool employed by the ACCC when it has reasonable suspicions that an infringement has taken place. However, in this case, you’d be forgiven for thinking this was a lay down misere.

The upshot

Truth in advertising is a key focus for the ACCC in 2015. If you make false or misleading representations about your products, their origins, features, or consumers’ rights, you’re bound to attract the wrong kind of attention.

If you’ve any questions or concerns regarding consumer laws (including product labelling) or competition issues, give us a call on (03) 9663 9877. We can help you navigate the compliance maze, and devise a compliance program (including training) for your staff. And we can do all this for an agreed fixed fee.

Paralegal

Naomi is a paralegal in the Competition Law & Regulatory Compliance team, focusing on marketing activations, advertising review and trade promotions compliance.  She joined KHQ after having spent... Read More