The Australian Competition and Consumer Commission has initiated proceedings in the Federal Court against business directory service provider ABG Pages, which the watchdog alleges made false and misleading representations and engaged in unconscionable conduct when dealing with small businesses.
ABG Pages offers an online business directory service to Australian clients, many of whom are small business owners. Business can pay a fee to the business for basic ad listings, display ads and services like promotional blogs.
The ACCC claims SMEs have been paying significant amounts of money to the company for services that are of little value and that ABG Pages misled businesses about the total number and price of contracts they had entered into. The company is also accused of refusing to cancel contracts with small businesses and using high pressure sales tactics.
The court action is against ABG Pages Pty Ltd and an unnamed individual, with the ACCC seeking penalties, declarations, injunctions, a disqualification order against the individual, findings of fact, corrective notices and costs.
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“The ACCC alleges that the conduct of ABG Pages resulted in a number of small businesses paying significant amounts of money to ABG Pages for advertising they did not want,” ACCC deputy chair Dr Michael Schaper said.
Schaper told SmartCompany small businesses need to take care when selecting advertising and marketing services, particularly if they’re on the lookout for an affordable option or to support a new operator.
“On the one hand, every small business wants to offer a new business an opportunity as well, but not if you’re not going to get the service and if you’re losing the money,” Schaper says.
“Before you engage anyone, talk to other people you know—word-of-mouth is tremendously powerful in this. Just double check, use a bit of caution.”
If business owners do run into trouble with any provider who fails to do what they said they would, it’s important to speak up so that regulatory bodies like the ACCC can find patterns of behaviour and consider taking action, Schaper says.
“If you do have a bad experience, let industry bodies know,” he says.
SmartCompany contacted ABG Pages for comment on the case but did not receive a response prior to publication.
Clarity is key
Principal at Ampersand Legal Narissa Corrigan says when selling services like marketing or advertising the same requirements apply as other services—businesses must tell the truth.
“It comes back to the usual position that when you are selling something and promoting good and services to consumers, you have to make sure what you’re saying is not misleading in any way,” Corrigan says.
When providing a service that has potential additional ad-ons or extras, it’s important to be clear with customers about their options and remove any ambiguity around what they’re paying for. Having this clearly outlined will avoid problems later, Corrigan says.
“You can always change what the relationship is, but always contact the consumer. If you notify the consumer then that’s going to help to undo any potential [problems],” she says.
“Everything you do needs to be truthful – and the customer needs to know what they’re buying.”