A photography business that sold baby and child portraits in shopping centres around the country has been ordered to refund all of its customers over a two-year period and pay a fine of $1.1 million, following court action by the consumer watchdog.
The Australian Competition and Consumer Commission initiated legal proceedings against Lifestyle Photographers, trading as Expression Sessions, in September 2015, alleging the businesses engaged in misleading and unconscionable conduct during 2012 and 2014.
The ACCC said at the time Expression Sessions offered prospective customers free photographs of their children without the need to enter contracts, despite requiring customers to do exactly that in order to receive the photographs.
Expressions Sessions was accused of using unfair tactics and undue pressure when seeking to sell its products and offering unfair contract terms. The ACCC said the business did not provide clear and accurate information about its contract terms and targeted vulnerable consumers.
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This week the Federal Court found in the ACCC’s favour and imposed a penalty of $1.1 million on the business.
Expressions Sessions has also been ordered to write to all customers that purchased photographs from the business between 2012 and 2014 and offer them refunds.
However, it is not clear where the funds will come from in order to pay the penalty imposed by the court as Lifestyle Photographers Pty Ltd sold the Expression Sessions business to a related company, Easy Payments Pty Ltd, in December 2015 before entering voluntary administration.
The ACCC included Easy Payments Pty Ltd in the proceedings and the court made orders against both companies.
A spokesperson for the ACCC told SmartCompany the regulator will “seek to enforce the penalty against the liquidators of Lifestyle Photographers”.
According to notices lodged with the Australian Securities and Investments Commission, the company was subject to a deed of company arrangement as of July 2016, and a final dividend from the company was expected to by declared by August 26.
Voluntary administrator Dragan Ljubic from Tribeca Advisory, who administered the deed, confirmed to SmartCompany that he is no longer the administrator or deed administrator for Lifestyle Photographers Pty Ltd.
SmartCompany attempted to contact Expression Sessions this morning but the phone number listed for the business directs to a customer service line for customers who have payment plans with the business. SmartCompany was unable to contact Easy Payments Pty Ltd.
The ACCC’s action against Expression Sessions is the latest example of the consumer watchdog seeking to protect vulnerable or disadvantaged consumers, and ACCC deputy chair Delia Rickard said in a statement protecting these groups will remain a priority area.
“In many cases, Expression Sessions’ customers were Aboriginal or Torres Strait Islander or were financially disadvantaged,” Rickard said.
“Pressuring vulnerable or disadvantaged consumers into buying products they cannot afford is clearly unacceptable.
“Businesses have a responsibility to be upfront with consumers and clearly explain the total price of the goods and services they are offering.”