Educational colleges taught a lesson about unconscionable conduct
Three educational colleges have been found liable for misleading conduct and unconscionable conduct over their sales strategies. They targeted vulnerable people and signed them up to courses which they were unlikely to complete (given poor literacy and numeracy skills, inability to use a computer or even no internet connection). This left the students with a significant debt, all while the colleges made money. The ACCC has taken a pretty hard stance on this. The first college, Empower, got a record $26.5M penalty and an order to repay $56M because it had established a system of unconscionable conduct. The second, Unique, faced a $4.165M penalty (lower because it wasn't found to be a 'system' of unconscionable conduct). A third college, AIPE, has just been found guilty of the dreaded 'system' of unconscionable conduct, so expect big penalties there.
LG fined $160k for misleading two consumers about ACL rights
You read that correctly, two consumers affected... $160k penalty. The Federal Court is not messing around when it comes to misleading representations about consumer guarantees. Consumers have rights to repair, replacements or refunds under Australian Consumer Law – you can't get rid of these, and they are different to warranties. So when LG implied on phone calls that the two customers had no rights other than the manufacturer warranties – the Federal Court was happy to find the breach and impose a huge penalty. A penalty is supposed to have a deterrent effect on the business in the wrong, and everyone else. For a long time big businesses got off pretty lightly with small ACL penalties compared to the scale of their breach or the size of their revenue. Not no more.
First obstruction charge for an ACCC investigation
Bluescope's Jason Ellis is the first person to face criminal charges for inciting obstruction of a Commonwealth official in an ACCC investigation. The ACCC investigated alleged attempts by Bluescope and Mr Ellis to induce steel distributors to fix prices. While criminal cartel charges were dropped, the civil case is ongoing and Mr Ellis is now facing criminal charges of his own. The offence he is charged with occurs where a person intends the obstruction, urges the commission of the obstruction but doesn't directly commit the obstruction. He's facing two charges, and up to 2 years' jail per charge.
Christmas and Easter promotions not paying off for Flight Centre
Flight Centre was fined for its 2018 Christmas and 2019 Easter promotions. It seemed simple enough, spend $1500 on a holiday package and get a $250 voucher. The fine print: the voucher only applied to your next holiday where the next booking was more than $5000. There was also a limited time frame to redeem the offer.
Lessons. You need to disclose all the key elements of a promotion, and you need to make sure your headlines are consistent with them. Fine print qualifiers can help you out sometimes, but you can't use them to change overall meaning of the headline.
Optus hit with penalty for misleading NBN claims. Again.
Optus has been ordered to pay $6.4M in penalties for misleading NBN claims. It was misleading to tell their mobile customers that their existing home broadband services (provided by Optus' competitors) would be disconnected 'very soon' and to switch to Optus 'before it's too late', when there was no imminent disconnection. The ACCC was concerned about Optus creating a false sense of urgency. This was the second time Optus has been pinged for this sort of selling. Last year it paid a $1.5M for similar behaviour. The learning is to not overcook your call to action.
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