Mackay Chapman August 2024 ACCC Update

In this month’s ACCC update:

• 'Oodie' pays more than $100,000 in penalties following alleged failure to put fire danger warning labels on Kids Beach Oodies;
• Grays to redress consumers and pay $10 million in penalties for misleading descriptions of cars;
• ACCC consulting on guide to sustainability collaborations;
• Qantas agrees to $20m payments to customers and, subject to court approval, a $100m penalty for misleading consumers;
• Criminals are targeting victims of previous scams promising financial recovery; and
• DG Institute was ordered to pay $14.7m in consumer refunds and penalties of $5m for misleading students in wealth seminars.

'Oodie' Pays More Than $100,000 in Penalties Following Alleged Failure to Put Fire Danger Warning Labels on Kids Beach Oodies

Davie Clothing, the maker of the popular Oodie loungewear, has been fined $101,280 for failing to meet child safety standards. 

The ACCC found that six styles of the Kids Beach Oodie lacked required fire hazard warning labels. Over 2,400 of these products were sold before the issue was identified. The ACCC emphasised the importance of child safety and warned other clothing suppliers to ensure compliance with safety regulations. Davie Clothing has since issued a product recall and agreed to implement corrective measures.

Details can be found here.

Grays to Redress Consumers and Pay $10 Million in Penalties for Misleading Descriptions of Cars

Grays eCommerce, a prominent online auction platform, has been fined $10 million for misleading customers about the condition and features of cars listed for sale. The ACCC found false information describing hundreds of vehicles sold between 2020 and 2022. This resulted in consumers potentially overpaying or buying cars they wouldn't have chosen with accurate details.

Grays has admitted to the misconduct and will compensate affected consumers. The company will also implement a compliance program to ensure future adherence to consumer protection laws.

‍ACCC Consulting on Guide to Sustainability Collaborations

The ACCC has released draft guidelines to help businesses understand competition law when working together on environmental initiatives. The ACCC aims to clarify when such collaborations might raise competition concerns and when they may qualify for authorisation.

The regulator is encouraging feedback on the draft guide before finalising it later this year. This move reflects the ACCC's focus on promoting sustainable business practices while ensuring fair competition.

Qantas Agrees to $20m Payments to Customers and, Subject to Court Approval, a $100m Penalty for Misleading Consumers

Qantas has admitted to misleading customers by selling tickets for flights it knew would be cancelled. The airline will pay a $100 million penalty and compensate affected customers with $20 million. 

The ACCC launched legal action against Qantas last year for selling tickets to thousands of later cancelled flights.

Criminals Targeting Victims of Previous Scams Promising Financial Recovery

Australians have been warend against "money recovery" scams targeting victims of previous scams. These criminals promise to get lost money back for an upfront fee but never deliver.

The Problem:

Reports of money recovery scams soared 129% in 6 months, with losses of over $2.9 million.  Older Australians are the most targeted and suffer the highest losses.

How it Works:

Scammers pose as trusted figures like lawyers, government agencies, or even charities.

They may claim to track stolen funds or connect victims with fake recovery services.

Victims are pressured to pay upfront fees for non-existent services.

Protect Yourself:

• Don't engage with anyone offering money recovery after a scam.
• Report the fraud to the police and contact your financial institution.
• Never give personal or financial information to strangers online.

Remember: Legitimate services rarely recover stolen funds. Report all scams to Scamwatch to help stop others from falling victim.

DG Institute Ordered to Pay $14.7m in Consumer Refunds, and Penalties of $5m, for Misleading Students in Wealth Seminars.

Master Wealth Control Pty Ltd, also known as ‘DG Institute’, has been ordered to pay a $5million penalty for misleading consumers about its education programs. The company falsely advertised its Real Estate Rescue and Master Wealth Control courses, promising unrealistic financial outcomes.

In addition to the penalty, DG Institute must refund $14.7 million to over 2,100 students who enrolled in the Master Wealth Control program. The company's director, Dominique Grubisa, has been fined $1 million and disqualified from managing corporations for five years.

The ACCC's action highlights the importance of accurate advertising and consumer protection.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.