Tiny Tots will refund consumers up to $50,000 after it was found the children’s photography business breached Australian Consumer Law.
Tiny Tots has given the Australian Competition and Consumer Commission a court-enforceable undertaking to refund consumers and shore-up business practices after it entered into 1400 unsolicited agreements.
The ACCC says consumers were not informed about how to terminate the agreement and were not provided with the company’s contact details. The ACCC also argues consumers were misled because they were told they did not have any cooling off rights when they did.
ACCC Northern Territory regional director Derek Farrell said in a statement he was alarmed by Tiny Tot’s impact on customers in rural and remote locations.
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“It is particularly concerning to the ACCC that a significant number of Tiny Tot’s customers were from remote indigenous communities,” he said. “The right to cancel unsolicited contracts during a cooling off period is a fundamental protection for consumers under the Australian Consumer Law.”
Farrell went on to say misleading customers was unacceptable behaviour.
“Companies who engage in unsolicited selling in remote areas should be crystal clear that the law applies to them and will be enforced if it is breached,” he said.
Sally Scott, partner at Hall & Wilcox, told SmartCompany under Australian Consumer Law consumers who enter into unsolicited consumer agreements have a right to terminate the contract within a cooling off period.
“The cooling off period ranges from 10 days to six months depending on a number of factors, including how the agreement was entered into,” she said. “If a consumer terminates within the cooling off period, the consumer is entitled to a full refund and must return any goods received.”
Scott says any attempt by a seller to mislead consumers about their right to terminate during a cooling off period would expose the seller to certain penalties.
“Any provision of an unsolicited consumer agreement that seeks to avoid the cooling off period termination right would be void and would expose the seller to action by the ACCC for contravention of the Australian Consumer Law.”
As part of the court-enforceable undertaking, Tiny Tots has agreed to offer refunds to customers who live in remote communities who were provided with photographic services and are currently making payments under the agreement.
The business has also agreed to establish a compliance program to minimise the company’s risk of future breaches. The program will include cross-cultural training for staff who are providing services to Indigenous customers.
Tony Tots was contacted for comment but did not respond prior to publication.