• Faking Testimonials

    Posted on February 6, 2014 at 12:05 pm under Business Law category.

    Faking Testimonials and Places of Origin.

    In a recent Federal Court case, the Australian Competition and Consumer Commission brought action against Worldwide Energy and Manufacturing Australia Pty Ltd (WEMA), P & N Pty Ltd and P & N NSW Pty Ltd. These companies distribute solar panels to consumers in Australia.

    The companies advertised their Australian solar panels via newspapers, television, online media (YouTube) and on their website. They also placed testimonials on their website from previous customers that promoted their goods.

    The Problem?

    The solar panels were made in China, not Australia. Furthermore the company, not the consumers, wrote the testimonials.

    Why Is This A Problem?

    Australian Consumer Law (ACL) prevents a person in trade or commerce from engaging in misleading or deceptive conduct, or conduct that is likely to mislead or deceive. The ACL also specifically excludes false or misleading conduct in relation to the sale or promotion of goods in regards to their place of origin, and also specifically excludes a person from making false testimonials about a product or service.

    The Sentence.

    The Federal Court in its sentence subjected both the company and its director to numerous orders. These orders serve to do two things, firstly to punish the offenders and secondly to re-educate the public on the product/s by correcting the false claims.

    For example, the company must publish within 28 days a corrective advertisement given to them by the Federal Court in 7 newspapers (chosen by the court). They must also publish a court ordered corrective notice on their website, viewable in the top 1/3 of the homepage. This notice has to be crawlable (able to be indexed by a search engine), not displayed in a pop-up and must be shown for 30 days.

    Numerous financial penalties were also handed down, including a $20,000 penalty to be paid by Nick Patel, the sole Director of P&N and WEMA.

    How Can I Prevent This?

    If you are unsure about the legality of a business practice, it is best to consult with your solicitor prior to taking action. We can advise you on all relevant aspects of a business, including the buying and selling of property, commercial or retail leasing, and partnerships.

    Get in touch with BM Law Solicitors on (07) 3482 6999 or email us at mail@bmlaw.com.au.