An online appliance store has drawn the ire of the NSW Fair Trading Commissioner, who issued a warning last week to consumers about dealing with the company.
NSW Fair Trading Commissioner Rod Stowe last week issued the warning about United Appliance (Australia) after receiving more than 60 complaints about the business over the period of just over a year.
United Appliance (Australia) is an online store that provides service calls to customers for repairs of household appliances such as stoves, fridges and washing machines.
Sign up for SmartCompany newsletter.
Free to your inbox every weekday
The NSW Office of Fair Trading said in a statement it has received 67 complaints related to customers making upfront payments for repairs and services but the business not honouring those contracts with clients, with some customers reporting representatives from United Appliance left their premises without finishing the repair job.
Consumers have also reported difficulties contacting United Appliance about their complaints, while others complained the work was not being done in a reasonable time frame.
Stowe said in a statement the alleged conduct of United Appliance is harming NSW consumers and he issued the public warning about the business under section 86A of the Fair Trading Act 1987.
Alistair little, partner at TressCox Lawyers, told SmartCompany this morning the Fair Trading Commissioner has the power to issue public warnings where they believe a business is selling unsatisfactory goods or services.
“The commissioner has to be convinced the disclosure is in the public interest but once satisfied can issue warnings of this sort,” he says.
Little says such warnings from the commissioner are “not done lightly” and for one to be issued about United Appliance, there must have been a “serious number of complaints” about the business.
“One would think the issuing of this notice would be extremely damaging to a business, and also it is likely to cause the Australian Competition and Consumer Commission to have a look at conduct of the business,” he says.
Little says a public warning of this sort is often just the first step and may not be the last.
He says there are various offences under Australian Consumer Law with regards to making false claims about warranties and services that can result in businesses and their directors incurring fines.
In such cases there is also the potential for criminal charges for offences such as taking money for provision of services and goods when there is no intention to make good on those promises.
“These are some potential problems to be faced by this company,” Little says.
“Individual directors can be personally liable, not just the company.”
Little says it is possible United Appliance did not have the appropriate mechanism to deal with complaints appropriately and says compliance programs to deal with customer complaints are very important for businesses.
Little says there are a number of lessons for other small businesses.
“The important thing to realise is if you’re going to offer a service, you need to be able to deliver that service,” he says.
“If you offer something without the ability to do so, you could be in breach of Australian Consumer Law which could lead you to have to pay damages but could also mean you are liable for prosecution.”
“If you do receive contact from Fair Trading or the ACCC, you should respond immediately, seriously and in detail.”
SmartCompany contacted United Appliance but did not receive a response prior to publication.