Online forum Whirlpool is being dragged to court by a Melbourne-based financial services provider, which says the Australian website is refusing to remove a negative post about its services.
WCS Group, which is based in the Melbourne suburb of Essendon and licensed through the National Australia Bank, filed a statement of claim against Whirlpool in the Supreme Court of Victoria on August 7.
WCS Group alleges a series of posts by Whirlpool user ‘homemadecook’, who it believes to be a competitor or disgruntled former employee or contractor, have damaged its reputation.
The group says the comments are “false, misleading or deceptive or likely to mislead or deceive” and Whirlpool has in turn contravened Australian Consumer Law by not removing the comments.
WCS is seeking an injunction to have the post removed, having previously requested the posts be removed three times through its lawyers Wantrup and Associates. WCS Group is also seeking damages and costs of an unspecified amount.
According to the statement of claim seen by SmartCompany, WCS Group’s complaint relates to a series of posts made by ‘homemadecook’ on Whirlpool on May 29.
The Whirlpool user, who said they are a mother of two, claimed they were approached by WCS Group and quoted $18,000 for its services.
‘Homemadecook’ said WCS Group promised to reduce their mortgage to 10 years, based on claims the user’s income would increase over time. Another post said advice from Whirlpool users helped them avoid using services from WCS Group.
WCS argued Whirlpool “derived a commercial benefit” from leaving the comments on the forum. However, it is well known that Whirlpool is not a commercial operation.
The company said the comments by ‘homemadecook’ are likely to lead other consumers to believe WCS used “forceful and unsavoury business practices and overcharged for its services”.
But Whirlpool founder Simon Wright told SmartCompany Whirlpool believes the claims by WCS Group “lack merit and we intend to defend the case vigorously”.
“Whirlpool has previously attempted to resolve this matter with WCS Group and is disappointed that they have now commenced legal proceedings,” says Wright.
This is not the first time Whirlpool has faced legal action over comments left on the site, with accounting software firm 2Clix Australia claiming in 2007 comments published on Whirlpool were “false and malicious”. However, Fairfax reports the petition was later withdrawn.
Under the Competition and Consumer Act 2010, websites that do not remove a post or review they know is fake or misleading can face a maximum penalty of $1.1 million.
Sally Scott, partner at Hall & Wilcox, told SmartCompany there are a number of instances in which a website operate can be liable for what others post on their website.
“Firstly, the website operator can be liable if it is seen by the public as adopting a post, as opposed to merely passing it on,” says Scott.
“I expect many review sites would come across as merely passing on reviews, rather than adopting them.”
“Secondly, the website operator could be liable as an accessory,” says Scott. “If the website operator has knowledge of the post and has knowledge that it is an unlawful post, then it could be liable as an accessory.”
Scott says for businesses concerned about negative online reviews that they believe are fake, the first step is to write to the website operator to inform them of the review and ask for it to be removed.
“It would be far more likely that the fake review would be removed if the business forwards the website operator evidence that the review is fake,” says Scott.
“However, it may be difficult to put evidence together.”
But Scott says, even without evidence, it is worth contacting the website operator and attempting to have the post removed.
SmartCompany attempted to contact WCS Group and Wantrup and Associates but did not receive a response prior to publication.