The consumer watchdog has penalised a telecommunications company for allegedly making misleading representations by claiming the Australian Competition and Consumer Commission endorsed its products.
Australian Private Networks, which trades as Activ8me, was issued a infringement notice and penalised $12,600 by the Australian Competition and Consumer Commission (ACCC) after it published messaging on its Facebook page and website promoting internet services.
Between November and January, the telco promoted itself as being “Named Australia’s #1 Sky MusterTM provider by the ACCC”. The Sky Muster satellite is an NBN service offered to rural Australians and businesses.
Activ8me had drawn on the National Broadband Network (NBN) wholesale market indicators report, published by the ACCC in November, when writing its marketing material. The report found that Activ8me has the highest number of customers which use the NBN Sky Muster satellite, out of the ten retail service providers that offer satellite services.
In a statement, the ACCC highlighted that while the report said the company had the highest number of satellites of this kind in operation, the watchdog did not endorse the company’s services, nor does it ever recommend or endorse individual operators.
Activ8me have since removed all online material relating to the claim. The ACCC has said it will act swiftly if businesses mislead prospective customers or use their logo inappropriately.
“The ACCC does not endorse or approve particular businesses and it is imperative that consumers trust our name and logo when it is used,” ACCC commissioner Sarah Court said in a statement.
SmartCompany contacted Activat8me for comment but the company did not respond prior to publication.
Word-for-word testimonials are best practice
Partner at business law firm Hall & Wilcox, Graydon Dowd, believes in this case, Activ8me’s phrasing suggested its services were the best.
“The wording itself denotes the provider being the best in the market, particularly in a market saturated by other telco providers. In those circumstances you’d need to be sure of the accuracy of the statement you’re making,” he tells SmartCompany.
Dowd says in the past businesses have been found to be in breach of Australian consumer law because of the way that they have worded testimonials.
“The important thing here is that if there is a testimonial provided by an entity, it has to be accurately described in any advertising or marketing collateral,” he says.
If a business decides to use data to market its products or services, Dowd says quoting the information verbatim is the best method.
“There can’t be any tweaking of the language or attributing a particular government department or regulatory body as endorsing that statement,” he says.
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“I think the lesson is when distilling the test from the source, there shouldn’t be any material straying away from the language itself.”