Small business complaints to the competition and consumer watchdog have jumped 84% in the last half of 2013, as a result of increased education campaigns and court action.
The Australian Competition and Consumer Commission’s latest half-yearly report into small businesses and franchises revealed general enquiries are also on the up, with more small businesses reaching out for information on their legal responsibilities.
The ACCC received almost 3600 complaints from small businesses between July 1 and December 31 last year.
“The growth in complaints received by small businesses and franchisees reflects the need to educate and empower the sector,” ACCC deputy chair Michael Schaper said in a statement.
“The rise in complaints is likely due to a number of factors such as increased awareness-raising campaigns by the ACCC amongst the small business sector, enhanced data collection of small issues within the Commission’s info-centre, and increasing public debate about small business matters and the Competition and Consumer Act in recent months.”
Of the 3600 complaints, most were about misleading conduct and false representations.
The ACCC has been particularly active in pursuing misleading conduct in the past year, with companies such as Luv-a-Duck and iiNet hit with substantial penalties.
One business felt the consumer watchdog’s wrath for purposefully misleading small businesses by demanding payment for ink cartridges they never purchased.
The Federal Court found that Artorios Ink engaged in misleading and deceptive conduct when it demanded payment for the unsolicited ink cartridges.
Schaper told SmartCompany small businesses frequently call the ACCC to report misconduct from other businesses or with queries about their own responsibilities.
“We ask them to look at both areas to make sure they’re not falling foul of the law, but also to consider what other businesses are doing,” he says.
“We receive a reasonable mix of both types of calls. People will call up to find out about their responsibilities and things like what acceptable refund policies are, but they also complain about their competition.
Schaper says not only do businesses dob in other businesses, but there have also been some whistleblowers.
“It pays to treat your customers well, your competitors and also your staff. If you’re not doing the right thing by your customers, you’ll find your competitors also call up. There are also some whistleblowers from within businesses who call to report something their managers are doing.”
The most common complaints about small businesses were regarding those operating in the advertising services sector, online and non-store retailers and store-based retailers.
The ACCC’s report also found small businesses lost more than $719,000 to false billing scams throughout 2013.
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