Complaints to the consumer watchdog about small businesses and franchises engaging in misleading conduct and false representations have dropped.
A report on small business activities launched by the Australian Competition and Consumer Commission chairman Rod Sims yesterday at the Council of Small Business of Australia’s national summit in Melbourne showed the decrease in complaints.
The report shows that in the last six months the ACCC received 678 complaints about small businesses engaging in misleading conduct and false representations, which was a drop from the 730 complaints received in the previous six months.
Get business news first
Sign up to SmartCompany’s daily newsletter
The number of complaints about misleading conduct and false representations by franchises fell even more dramatically from 100 complaints to 59.
“For most categories the number of complaints is down on the previous six months,” Sims said in his speech to the COSBOA summit.
Sims warned the ACCC is on the lookout for businesses making “premium claims” to get a selling advantage.
“They might say the product is sourced from a place which carries some extra prestige or meets a standard of quality or was produced in a certain way,” he said.
Sims said if premium claims about products were not accurate and truthful, both consumers and other businesses lost out.
“What if the meat is not sourced from King Island? What if the eggs aren’t free range?” he said.
“Obviously, the consumer is at a loss because they don’t get what they paid for. Businesses doing the right thing also lose out because they are not competing on equal terms.
“The point I’m making is that many of the ACCC’s consumer enforcement outcomes benefit small business.”
Sims pointed to a recent penalty of $50,000 imposed by the Federal Court on Hooker Meats, which falsely claimed its meat was sourced from King Island, and infringement notices totalling $13,200 paid by The Big Olive Company which labelled products as “extra virgin olive oil.”
“If you need further proof that misleading and deceptive conduct is something that concerns small businesses look no further than our complaint data,” Sims said.