A Queensland business owner has been fined $13,000 and ordered to pay more than $4000 in compensation, after failing to provide search engine optimisation services that he accepted payment for.
Nathan Todd Kerrins is the sole director of “Fix My Home Australia Pty Ltd”, which traded as “The Trusted Group.” He was fined $13,000 by the Southport Magistrates Court last week after being found guilty on two charges of wrongly accepting payment for goods and services.
Kerrins has also been ordered to provide $4,180 in compensation to two businesses he promised services to.
The Trusted Group is a service that claims to help small businesses with search engine optimisation and marketing, claiming on its website: “Our passion is helping small businesses take advantage of the online space in order to get new customers through their doors”.
One small business Kerrins promised to help was a Victorian after-market vehicle parts supplier, which paid Kerrins to complete a $1,980 Google advertising campaign, according to the Queensland Office of Fair Trading.
The other company was a Mackay building company, which paid $2,200 for a year-long advertising campaign to get the business at the top of search results.
Kerrins did not appear in court over the charges and his business ceased trading in January this year. SmartCompany’s attempts to contact the business were met with a disconnected phone line.
Thomas Kaldor, commercial lawyer at LegalVision, told SmartCompany the provision breached in this case is “relatively straightforward”.
“If a business has accepted payment for something that they don’t intend to deliver, they have breached the ACL [Australian Consumer Law],” Kaldor said.
Looking at the case, Kaldor notes the penalties imposed are lower than what businesses could be charged, saying the legislation provides for fines higher than $1 million.
“It’s definitely lower than the amounts provided in the ACL, but courts will have some discretion. If the person is a body corporate, then they can rack up fines of up to $1.1 million,” he says.
Kaldor notes these provisions of ACL are not intended to punish businesses that “genuinely try to meet supply agreements”, but he says businesses should aim to be clear in what they offer.
“If it’s beyond a business’s control or the business has taken all reasonable precautions, then it will not be punished,” Kaldor says.
“Also, if the fault is with the person or business you are supplying, you will not be fined.”
Be careful what you promise
Kaldor claims much of what is contained in the ACL is “common sense”, but acknowledges issues with online businesses can be more difficult.
“If you’re promising to sell a drink bottle, and the customer does not receive a drink bottle, it’s very easy to establish a case,” he says.
“With these online cases, you can run into the territory of a contractual dispute, and it might be harder to prompt a fair trading organisation to take action.”
Kaldor says there is also a grey area where the services promised are delivered but at a much lower quality, such as “promising an excellent website but delivering one below par”.
Consumers are armed with more knowledge than they ever have been says Kaldor, and due to this, a lower number of these cases should occur.
“The amount of information online available means that a consumer or a business should never go into a transaction blind,” Kaldor says.
“You can check Google reviews, or assess the credibility of the business’ website and inform yourself to some extent.”