No escaping $50,000 penalty for false and misleading claims

19 Sep 2017

  • Governance

As promised in an address to the National Consumer Congress in Melbourne earlier this year, the Australian Competition and Consumer Commission (ACCC) is paying close attention to false and/or misleading conduct, including claims and impressions.

More often than not, companies don’t intentionally mislead customers.

“Many companies get picked up for misleading advertising, and it’s usually because they’re not being clear about a certain product feature, price or benefit”, says Jodie Sangster, CEO of ADMA.

Intentional or not, publishing marketing or advertising that creates a false impression can be costly for organisations. Not only can it affect consumer trust of the brand, but it can also result in hefty fines and penalties.

As is the case with ACCC’s crackdown on Mr Tuan Nguyen, who was found in 2013 by the Court to have been “knowingly concerned in false or misleading representations made by Artorios Ink to five small businesses to sell printer cartridges.”  The Court fined Mr Nguyen $50,000, but he made no payments and instead filed for bankruptcy.  

Mr Nguyen, who has now been discharged from bankruptcy, will have to pay a $50,000 fine after the ACCC took action in August 2017 to enforce the $50,000 penalty.  This is a timely reminder that business owners who contravene the consumer protection laws cannot escape paying Court ordered penalties by filing for bankruptcy, as the ACCC can take action to enforce the penalties afterward.

To find out more about misleading claims, visit the ACCC website.

If you’re an ADMA member, you can also call the Regulatory Affairs Manager to discuss any questions or concerns you may have about your obligations under Australia’s consumer protection laws, including misleading and deceptive conduct.

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CATEGORY Governance

TYPE Article