The founder of Refund Home Loans, Wayne Ormond, has been slammed by Australian Competition and Consumer Commission chairman Graeme Samuels after Ormond admitted that statements made to franchisees about a supposed agreement with the ACCC were false and misleading.
The Federal Court found Ormond had breached the Trade Practices Act after telling franchisees that the ACCC had approved the way Refund was dealing with franchisees.
“Mate, I’ve had meetings with Graeme Samuel himself. I have nothing to worry about,” Ormond told franchisees, according to the ACCC.
But Ormond has now admitted the statements were false and misleading and Samuels is clearly unimpressed of the use of the watchdog’s name.
“Using the name of the ACCC or individual ACCC officers as a means of discouraging franchisees from exploring their own legal rights is reprehensible,” he said in a statement.
“Franchisors and franchisees have a special business relationship. Franchisees trust their franchisor to provide honest and reliable information as to their own business and about franchising generally and to mislead them in this manner is an abuse of trust.”
Samuels has emphasised that the “does not, in any circumstances, approve individual conduct”.
Refund Home Loans, which was ranked 43 on SmartCompany’s Smart50 list in 2009, has grown quickly in the last few years, with average annual revenue growth of 42.5% over the past three years and revenue of $15.5 million in 2008-09.
The company has more than 300 franchisees.
Ormond is no stranger to dealing with the ACCC. Back in 2007, he complained to the ACCC over the way Australia’s big four banks were treating the refund mortgage broking model he was using, whereby part of the commission earned by the mortgage broker is refunded to the customer.
In August 2007, the ACCC took action against the ANZ Bank, alleging the bank had breached the TPA by seeking to limit the level of refund that broker Mortgage Refunds (which Ormond acquired in April 2007) could provide to customers in respect of ANZ home loans.
Ormond was not available for comment prior to publication.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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