COMPETITION AND CONSUMER LAW UPDATE – SEPTEMBER 2019 EDITION
This is the latest in a monthly series detailing developments in competition and consumer law in Australia, including the activities of Australia's competition and consumer regulator, the Australian Competition and Consumer Commission (ACCC), published judgments, recently issued proceedings and any relevant changes in the law.
This article covers events which occurred in September 2019. The previous August 2019 update is available here.
Ashley & Martin contract terms held to be unfair
Justice Banks-Smith has found that the hair regrowth company Ashley & Martin used unfair terms in certain standard form customer contracts. Under the contracts, customers paid for their upcoming treatment before they received medical advice, and were required to pay 100% of the price if they terminated the contract more than two days after receiving medical advice. This was held to be unfair on the basis that it was insufficient time for consumers to consider the medical advice before deciding whether to continue with the contract. The Federal Court has declared that the terms in question are void, and the ACCC has made an application for orders that affected consumers be compensated, which will be heard by the Court on 22 October 2019. Find the ACCC media release here.
LG to pay $160,000 for misleading consumers
Following a finding in June last year that LG misled certain consumers regarding their refund rights, the Federal Court has imposed penalties of $160,000 on the electronics company. During telephone conversations with customers, LG employees had implied that customers who believed they had purchased faulty televisions had no refund rights other than those under LG's warranty against defects when in fact, the Australian Consumer Law has various consumer guarantees that cannot be excluded or modified. In imposing the penalties, Justice Middleton had regard to the need for deterring similar conduct but also to the fact that the infractions were 'relatively minor'. Find the ACCC media release here.
Full Court rules on Ultra Tune franchising appeal
Earlier this year, Ultra Tune was found to have breached the Franchising Code of Conduct by failing to disclose sufficient information in its marketing fund statements to franchisees. Following an appeal by Ultra Tune, the Full Federal Court has upheld the finding that Ultra Tune breached the code, but found that the penalties should be reduced from $2.6 million to approximately $2 million. The Full Court disagreed with the trial judge that the breaches were deliberate and instead held that they resulted from 'egregious inadvertence', and therefore reduced the penalties accordingly. Find the ACCC media release here.
ACCC sues Medibank for false representations
The ACCC has commenced proceedings in the Federal Court against Medibank, alleging that the insurance company told customers of its AHM subsidiary that they were not eligible for joint investigations or reconstruction procedures, when in fact these procedures were covered under their policies. Medibank self-reported the conduct to the ACCC and has begun compensating affected members. Find the ACCC media release, including links to the originating court documents, here.
LEGISLATIVE AN OTHER DEVELOPMENTS
Telco BVivid agrees to pay penalties for telemarketing
BVivid, an NBN service provider, has agreed to court-enforceable undertakings and $25,200 in penalties after the ACCC issued it with infringement notices regarding telemarketing calls. Between 2017 and 2018, BVivid called consumers and told them that their internet would be disconnected if they did not move to the NBN, even though there is generally an 18-month period for consumers to switch services. BVivid also breached unsolicited consumer agreement protections in the Australian Consumer Law by not providing customers with a sufficient cooling-off period. BVivid has undertaken to contact all affected consumers and offer to release them from their contracts. Find the ACCC media release here.
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