Articles on this Page
- 05/05/15--09:16: _NIB coughs up $10,2...
- 05/06/15--07:48: _ACCC probes HealthE...
- 05/06/15--08:59: _Collapsed training ...
- 05/07/15--09:24: _Bonsoy’s $25 millio...
- 05/12/15--09:23: _Allegedly drunk wor...
- 05/13/15--09:35: _Federal Court order...
- 05/14/15--08:03: _Websites claiming t...
- 05/17/15--09:19: _Melbourne cleaning ...
- 05/20/15--09:02: _Tribunal finds no b...
- 05/20/15--09:18: _Property startup Re...
- 05/21/15--08:49: _Fleurieu Milk Compa...
- 05/21/15--09:27: _Queensland security...
- 05/21/15--09:27: _NSW government to c...
- 05/24/15--08:57: _Former Fiat Chrysle...
- 05/24/15--09:33: _Deals.com.au pays $...
- 05/26/15--08:17: _Businessman faces c...
- 05/26/15--08:40: _Former Aussie Home ...
- 05/28/15--08:17: _Worker who claimed ...
- 05/28/15--09:19: _Aussie juice compan...
- 05/28/15--09:13: _Fitbit accused of “...
- 05/05/15--09:16: NIB coughs up $10,200 over insurance ads as ACCC crackdown continues
- Properly defining what underquoting is;
- Ensuring agents have better recordkeeping of quotes;
- Clearly defining the prosecution around agent’s liability and
- Significantly increasing penalties from $22,000.
- 05/26/15--08:40: Former Aussie Home Loans rep pleads guilty to $7 million fraud
NIB has paid a $10,200 penalty to the Australian Competition and Consumer Commission following claims the health insurer contravened the Australian Consumer Law (ACL) in some of its advertising.
The penalty comes after the ACCC announced a crackdown on businesses in the private health insurance sector, along with debt collection and health services companies, as part of its 2015 Compliance and Enforcement Policy.
The policy document, released in March, also warned that truth in advertising is a key focus of the agency’s enforcement efforts this year.
Between December 2012 and November 2014, NIB advertised it would waive the waiting period for consumers taking out an insurance policy with its Extras coverage option, claiming the waiting period “usually” or “normally” lasted for two months.
However, NIB had made the no waiting period benefit available to all customers between December 2012 and November 2104.
Based on this, the ACCC sent NIB an infringement notice claiming it “had reasonable grounds to believe that NIB had contravened the ACL by making a false or misleading representation”.
While NIB subsequently paid the penalty, both the health insurer and the ACCC have said the payment of a penalty is not an admission the ACL was contravened.
In a statement issued to SmartCompany, a NIB spokesperson said the offer which was advertised as part of this campaign did not restrict customers accessing the full range of extras benefits included with the product.
“As the ACCC have indicated the penalty specified in the infringement notice is not an admission of a contravention of the Australian Consumer Law. NIB has taken on board the ACCC’s concerns and reviewed our internal practices,” the spokesperson said.
“In addition, NIB has not extended the offer beyond 30 November 2014.”
ACCC Commissioner Sarah Court said in a statement consumers must be able to make informed purchasing decisions.
“Claims that benefits are only available if a product or service is purchased by a specified date must be true and not mislead consumers,” Court said.
“Businesses which extend an offer for a considerable time beyond its original expiry date should ensure that representations made in connection with the offer do not become misleading to consumers as a result.”
The ACCC warns businesses to give consumers current information, use simple language, check that the overall impression is accurate, back up claims with documented evidence, note important limitations, correct any misunderstandings and be prepared to substantiate claims.
Consumer Action Law Centre senior policy officer David Leermakers told SmartCompany small businesses need to be careful not to contravene the misleading and deceptive conduct provisions of the ACL.
“It’s really simple – you are not allowed to lie to your customers,” Leermakers says.
“In this case, based on what I read, NIB said they would waive the two-month waiting period for customers with a particular product, when really it was waving it for everyone.”
“It’s the equivalent of a bricks-and-mortar retailer putting up a sign saying ‘Sale’ when really they’re charging customers the regular price. Effectively, that’s lying to people.”
“If you’re worried about an ad being misleading, start from the position that the ad is there to inform your customers, not mislead them. If you have a good product – and you believe in your product – then you won’t have any hesitations in telling people the truth about it.”
An online health appointment booking service backed by Telstra and Seven West Media has been questioned by the Australian Competition and Consumer Commission, after the watchdog received a complaint alleging the business was engaging in anti-competitive conduct.
However, the chief executive of HealthEngine has told SmartCompany the company has done nothing wrong.
HealthEngine is one of the larger players in the growing Australian market for online health appointment booking services. The business was founded in 2006 and has strategic partnerships with both Telstra and Seven West Media.
The ACCC contacted some of HealthEngine’s competitors in April after receiving a complaint about the company. A document seen by SmartCompany shows there are three allegations of anti-competitive conduct.
The first relates to HealthEngine allegedly offering a GP Access Grant to health practices on the condition they agree to subscribe to HealthEngine’s services exclusively for 12 months.
The complaint also alleges HealthEngine provided some of its online booking services for free to GP practices who are accredited with Australian General Practice Accreditation Limited (AGPAL), and thirdly, HealthEngine is accused of targeting its competitors’ clients to offer its services for free or at heavily discounted prices if they were to switch to HealthEngine.
The ACCC said in the document the practices may raise implications under sections of the Competition and Consumer Act, although the ACCC had “not yet formed a view about whether HealthEngine has contravened the Act”.
A spokesperson for the ACCC told SmartCompany the ACCC is unable to comment on potential investigations or complaints received, but said the regulator’s 2015 Enforcement and Compliance policy “identified competition and consumer issues in the health sector as a priority”.
Dr Marcus Tan, medical director and chief executive of HealthEngine, confirmed to SmartCompany the ACCC had contacted HealthEngine.
“The ACCC were keen to better understand our business and the markets we participate in and we have assisted them with their queries,” Tan says.
“We have taken this ‘complaint’ seriously and have sought legal opinion, which has led us to believe that we have not engaged in any anti-competitive conduct.”
Tan says HealthEngine is proud to partner with AGPAL and “delighted we can offer our services to practices who have a mutual commitment to delivering quality outcomes for patients”.
“Our arrangements with AGPAL are neither unique not anti-competitive in nature and is reflective of typical commercial arrangements made by membership organisations all the time and provided as a member benefit,” Tan says.
But Tan says he is not surprised about the timing of the complaint as competition in the industry heats up.
Research firm Frost & Sullivan has recently estimated just 3% of health practitioners in Australia are currently taking appointment bookings online but the market is poised for rapid growth as more providers come on board.
However, Tan says HealthEngine is the “clear market leader … [and] the only ones that offer a true network and marketplace”.
“We are like the ‘Trip Adviser for Health’ and are used by over 6 million Australians annually to find great health practitioners and book health appointments online all from the one site and mobile app,” Tan says, adding that HealthEngine works with “several thousand” private health practices, including GPs, dental, allied health and specialist practitioners.
“We are fortunate to have a different business model and several other product offerings to combat the commoditisation of the online booking industry and can therefore provide a unique offering, which has clearly resonated with the market and our customers.”
“In particular, we have experienced significant revenue growth across our multiple revenue streams in the last six months.”
A Keat Partners stand at a job fair (Source: Facebook)
A Melbourne training provider that advertised jobs that did not exist in order to lure potential employees into paying for training or internships with the company has been fined $166,000 in the Melbourne Magistrates’ Court.
Consumer Affairs Victoria took action against collapsed entity Keat Enterprises in the court last week, after it investigated several complaints last year over Keat Enterprises’ “bait and switch” tactics.
Keat Enterprises, which collapsed into voluntary administration in June 2014 after the accusations reached the media, was found to have posted fake ads for graduate accountants and interns on Seek.com.au in order to lure applicants into its unaccredited in-house training.
At the end of the fake job interviews, applicants were instead marketed training courses for work in the accounting industry, at a cost of between $2000 and $3000.
The majority of the ads did not mention any extra costs and those that did mention fees referred to them as “software licensing and CPA mentoring costs”.
Consumer Affairs Victoria also found Keat Enterprises undertook very little accountancy work as its main business was providing training services.
At the time of the investigation, Daniel Leong, chief executive of Keat Partners according to his LinkedIn profile, denied all allegations about his business to Fairfax, saying the claims seemed to have originated from “a few disgruntled ex-employees”.
But Keat Enterprises was last week convicted of 23 counts of engaging in misleading conduct in relation to employment, and 10 counts of making false and misleading representations about the supply of services, including making false representations that it was a tax agent.
“We are pleased that the court recognised the serious breaches committed by Keat Enterprises; this will serve as a reminder to other employment and training agencies that they will not get away with false and misleading conduct,” Consumer Affairs Victoria’s acting director Phil D’Adamo said in a statement.
However, a spokesperson from Consumer Affairs Victoria confirmed to SmartCompany Consumer Affairs will not take further action to obtain compensation.
“Obtaining compensation for affected consumers was considered in this case, however, due to the company being in liquidation such an order would not have been able to be granted without the leave of the Supreme Court,” said the spokesperson.
“Practically, in the circumstances of this case, there would most likely be insufficient resources to make good any compensation order.”
Keat Enterprises appointed Mathew Campbell Muldoon and Ken Sellers of Sellers Muldoon Benton as administrators of the company on June 3, 2014.
Fairfax reports a liquidator’s assessment from last year showed the company owed more than $65,000 to 15 employees and $160,000 to other unsecured creditors, including nearly $40,000 to the Australian Tax Office.
SmartCompany contacted Sellers Muldoon Benton but did not receive a response prior to publication.
Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany advertising fake jobs to solicit training courses is a clear breach of Australian Consumer Law.
“It’s trying to get people in the door under false pretences,” says Harris, who is not surprised the court imposed the substantial fine.
“If you’re in the business of doing that sort of thing, you’ll be in breach of Consumer Law and closing your doors like this business.”
Harris says a business must consider its conduct from the point of view of the consumer.
“Australian Consumer Law is all about protecting the consumer, so as a business, you need to put yourself in the consumer’s shoes and ask the question, am I telling the full story or am I being misleading? If it looks and feels dodgy and misleading, the choice not to do it should be obvious,” he says.
Harris says Consumer Affairs can generally take action against a company director or senior officer if a company has been liquidated.
The Consumer Affairs Victoria spokesperson confirmed it considers the fines and convictions imposed by the court in this matter have not finalised its dealings with other persons who may have been involved in the operations of Keat.
“As those matters are ongoing it is not appropriate to make any further comment at this time,” the spokesperson says.
Hundreds of consumers who drank Bonsoy soy milk and fell sick will now share in $25 million in compensation, in one of the biggest settlements in Australian food safety class action history.
The Victorian Supreme Court yesterday endorsed and finalised a settlement deal with manufacturer Bonsoy and around 500 claimants, after action was first launched against the products’ Australian distributor Spiral Foods in 2010.
Affected consumers claimed they fell ill after drinking milk that contained dangerously high iodine levels between 2004 and 2009.
According to the ABC, lead plaintiff Erin Downie said outside the court she was relieved the five-year battle for compensation was over.
"At times I didn't know if I could continue on, my health being the way it was,” said Downie.
"But I knew that I was the voice for hundreds of people that weren't able to have a voice and it was important that I stuck it out so that we could have justice."
Healthcare workers to be back-paid $4.8 million after six-year accounting error
Thousands of Australian aged care nurses, health workers and support staff will be reimbursed $4.8 million after their employer discovered it had been paying the incorrect overtime rates.
Aged Care Services Australia Group had been underpaying staff in Victoria, NSW, South Australia and Tasmania for the past six years.
The underpayments were discovered after an internal review of the company’s pay practises. Under a deal struck with the Fair Work Ombudsman, the company has already back-paid almost $1.5 million to current and former staff who were owed less than $5000 each.
Those who are owed more than $10,000 will receive a $500 upfront payment towards financial advice in order to determine the best way to receive their payments.
The underpayments occurred between November 2008 and November 2014.
Fair Work Ombudsman Natalie James said in a statement she believed the underpayments were not deliberate.
“It will serve as an example in the health and aged care industry, and to larger corporate employers more generally, of the risks of inadequate governance and payroll systems and the benefits of early co-operation with us,” James said.
“Employers big and small must ensure they take the time to understand and comply with the laws applicable to their workplace.”
Shares up on open
Local shares have traded higher this morning, following a positive lead from the US overnight.
“Share investors got some relief from world bond markets last night with the big increase in yields seen in recent days coming to an end, at least temporarily,” said Ric Spooner, chief market analyst at CMC Markets.
“The fact that bond markets steadied last night will provide a firm setting for the share market this morning as it heads into a big data session.”
“The RBA’s Statement of Monetary Policy will be closely watched this morning. It has the capacity to provide further insight into the strength or otherwise of the RBA’s easing bias,” added Spooner in a statement.
The S&P/ASX200 benchmark was down 40 points to 5685.7 points at 11:45am AEST. On Thursday, the Dow Jones closed up 0.46%, jumping 82.08 points to 17,924.1 points.
A Victorian chicken farm worker who was sacked after she was found asleep in a truck the morning after the Melbourne Cup has won her unfair dismissal bid and $7000 in compensation from the Fair Work Commission.
Heidi Cannon was dismissed from Mornington Peninsula-based Poultry Harvesting on November 5, 2014, following an incident where 50 to 60 chickens were run over or “smothered” while she was operating machinery.
Cannon, whose job was to move a large piece of machinery with an attached conveyor belt through a large shed to load chickens onto trays, started work at midnight after Cup day.
She admitted to drinking alcohol the day before, telling the commission she had three or four glasses of wine since noon.
Cannon denied she was intoxicated but said the wine had left her unable to drive to work, having gotten a lift to the farm in the morning.
“I didn’t want to take the risk of having a breathalyser because I would have had it on my breath still which could make me over .05,” Cannon told the commission, maintaining that she thought she was still capable of operating the machinery.
Cannon’s boss Matteo Geminian gave evidence he found her “passed out” in the truck, smelling like alcohol and said “50-60 birds got run over or smothered” by Cannon’s actions.
Geminian told Cannon to go home and said her conduct would be reason enough to fire her, but said he would call her the next day to discuss her future employment with the company.
Cannon gave evidence Geminian dismissed her via a telephone call a few hours later.
Poultry Harvesting argued that it had a valid reason for Cannon’s dismissal because she arrived for work intoxicated and her conduct could cause “serious and imminent risk to the health and safety of the person” or amounted to “conduct that caused serious and imminent risk to the reputation, viability or profitability of Poultry Harvesting’s business”.
But Commissioner Nick Wilson found Geminian had insufficient evidence that would allow him to form the view she was intoxicated to the point of being unable, or unsafe, to work and took no steps to objectively assess her condition.
He also found the company had not afforded her procedural fairness and was not provided with an opportunity to respond to the allegation.
Employment lawyer and partner at M+K Lawyers, Andrew Douglas, told SmartCompany being intoxicated at work represented serious misconduct under Fair Work regulations, but the onus falls upon the employer to prove the allegation.
But he says even if an employee is found to have done the wrong thing, it is still imperative to provide them with procedural fairness.
“Even if there is a valid reason for termination, a breach of procedural fairness will fundamentally undermine the fairness of the determination,” says Douglas.
Douglas reminds employers procedural fairness includes putting an allegation to someone, providing them with the opportunity to reply, allowing them to have a support person present, and asking the employee if there was any relevant circumstance that will inform the decision.
SmartCompany was unable to reach Poultry Harvesting for comment.
An online electronics retailer has been ordered to pay fines totalling $100,000 by the Federal Court for wrongly telling consumers they didn’t have the rights to refunds, repairs, or replacements for goods in various circumstances.
The fine comes just months after appliance giant Fisher & Paykel was hit with a $200,000 fine by the consumer watchdog for misleading customers into believing they needed to buy extended warranties for its products when they did not.
The most recent case was brought by the Australian Competition and Consumer Commission against a company called Electronic Bazaar, which sold camcorders, digital cameras, mobile phones, laptops, projectors and other electronic goods online.
The court found Electronic Bazaar had told consumers they were not entitled to a refund, repair, or replacement for goods that are no longer under an express warranty, where goods are not in their original packaging, or unless a claim was made within a specified time period. This was in contravention of its obligations under Australian Consumer Law (ACL).
Along with the $100,000 fine, Electronic Bazaar’s sole proprietor Dhruv Chopra was barred from engaging in similar conduct for a period of five years, ordered to undertake training on his obligations under the ACL and pay the ACCC's legal costs.
Following the decision, the website for Electronic Bazaar has closed and been replaced with a message reading: “This website is no longer operational. Please contact us on email@example.com for any assistance.”
However, the website previously advertised a one-year standard warranty, with the terms and conditions page noting extended warranties were available on selected products.
“Each product sold on the website is covered by a 12 months standard warranty. Extended warranties are available for purchase for some products, as listed on the website,” the terms and conditions page said.
In a statement, ACCC chairman Rod Sims said on four separate occasions between June 2012 and July 2014, Chopra allegedly also accepted payment for goods but failed to supply those goods to consumers within a specified, or reasonable, timeframe.
“The court's decision to impose a significant penalty on Mr Chopra, a sole trader, for misrepresenting consumers' refund and warranty rights makes it clear that this conduct is a serious breach of the Australian Consumer Law,” Sims said.
“A consumer’s right to a refund, repair, or replacement in certain circumstances under the ACL consumer guarantees cannot be excluded or modified by terms or conditions published on a website.”
Denise Boyd, director of policy and campaigns at the Consumer Action Law Centre, told SmartCompany the case is a reminder that small business owners need to be aware of their obligations under the ACL.
“No matter whether your business is small or large, if you’re in business you need to know what this law says, regardless of whether you’re selling goods or services,” Boyd says.
“The ACL overrides a company’s individual refunds policy.”
Boyd says customers can complain about a business’ conduct to state Consumer Affairs Departments or Office of Fair Trading if the item they have purchased doesn’t do what it said it should, if it’s faulty, not durable, or if it has an unacceptable appearance that’s radically different to what was advertised.
“That last one is especially important for online retailers,” she says.
“And it doesn’t matter if [a customer has] worn the item, used it, taken it out of the wrapper or cut the tags off.”
For business owners unsure of their obligations under ACL, Boyd recommends the segment from the ABC program The Checkout as being a very simple explanation of what the law covers.
SmartCompany contacted Electronic Bazaar but did not receive a response prior to publication.
An incorporated association behind two websites claiming to cure drug addicted patients has been slapped on the wrist by the consumer watchdog.
Get Off Drugs Naturally Foundation previously claimed its remedies had an 80% success rate within 30 days and that more than 70% of its patients remained drug-free for “many years” after completing its program.
The association also had testimonials from previous customers on its websites getoffdrugs.com and getoffdrugsnaturally.com.au.
But when Consumer Affairs Victoria investigated the claims in October 2014, the association was unable to provide evidence to prove 10 of its testimonials were genuinely from patients.
The association was also unable to cough up evidence that its treatment program was supported by verified scientific evidence.
The association claimed its detoxification program removed “the physical cravings for drugs and alcohol naturally” and even rid individuals of “unwanted toxins and chemicals”.
Get Off Drugs Naturally has since agreed to an enforceable undertaking with Consumer Affairs Victoria, which requires it to post a notice on its website for six months notifying visitors that its claims are not a substitute for medical advice.
The association must also remove all false claims about the effectiveness of programs and testimonials it is unable to substantiate, as well as introduce and maintain a two-year compliance program and pay $3000 to the Victorian Consumer Law Fund.
Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany businesses making health claims are at greater risk of being scrutinised by regulators.
“That is a definite target area for the regulators and one in which there is obviously a potential for vulnerability on the part of consumers who might be affected by those health claims,” Harris says.
“If you’re marketing goods on that basis then you’ll potentially attract the attention of the therapeutic goods administration as well and they have extensive enforcement powers.”
Harris says regulators now have a new enforcement tool at their disposal called a substantial notice procedure, which means they can investigate a business even if someone has not yet made a complaint.
“If you get one of these notices you need to be in a position to substantiate whatever claims you are making,” he says.
“It’s a relatively new enforcement tool and proven to be quite effective. It effectively reverses the onus of proof on the business making the claims.”
Harris says it was also interesting to note Get Off Drugs Naturally Foundation is an incorporated association.
“These are typically not seen as business organisations but the reality is they’re still subject to the consumer protection laws,” he says.
SmartCompany contacted Get Off Drugs Naturally Foundation but did not receive a response prior to publication.
A Melbourne-based cleaning company that told migrants they would qualify for permanent residency if they paid to complete a four week training program is facing court after the consumer watchdog initiated action this week.
The Australian Consumer and Competition Commission alleges Clinica asked migrants to pay significant sums of money on a misleading promise that they would be provided with sponsors and regional jobs which would lead to permanent residency in Australia.
The watchdog alleges between August 2012 and July 2013, Clinica told clients through its advertisements, oral statements, contracts and receipts that they would qualify for permanent residency by completing a 4-week cleaning course. The company told clients it had cleaning jobs with sponsoring employers available on the completion of the course.
However, the ACCC says Clinica did not have any such jobs available, and if there were cleaning jobs available, they would not have met the requirements for permanent residency under the relevant visa.
In promoting and implementing the program, the watchdog says Clinica engaged in unconscionable conduct.
It is also alleged Clinica’s current sole director, Radovan Montague Laski, was knowingly concerned in the conduct.
The ACCC has previously taken legal action against Laski in 2003 for misleading or deceptive conduct in relation to the sale and promotion of orange juice vending machines, including allegations he told clients his company had secured deals with major supermarkets, when it had not.
The ACCC is now seeking declarations, injunctions, a disqualification order against Laski and compensation orders for the clients, pecuniary penalties, findings of fact and costs.
“The alleged conduct by Clinica targeted some of the most vulnerable groups in our community with a view to profit,” ACCC Chairman Rod Sims said in a statement.
“The ACCC is currently prioritising its work in the area of consumer protection issues impacting on vulnerable and disadvantaged consumers, with a particular focus on consumers who are newly arrived in Australia.”
The matter will be heard in Melbourne on June 23.
Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany the ACCC has flagged it will crackdown on companies that deal with vulnerable members of the community.
“In general, if you are dealing with disadvantaged groups, such as people who don’t have proper command of English, then there several obligations you have,” says Harris.
Generally speaking, Harris says businesses cannot target vulnerable groups and cannot bring customers in by telling them the business has the ability to do something it does not.
“If you’re using their disadvantage to your advantage or to their detriment, there are multiple obligations you have to consider,” Harris says.
SmartCompany was unable to contact Clinica.
An employee has been unsuccessful in her claim her privacy was breached by her employer regarding information on her Facebook account.
Lara Jurecek was employed by Transport Safety Victoria and got into a dispute on Facebook with one of her colleagues and Facebook “friend” Paula Ferronato.
The dispute culminated in Jurecek writing on Ferronato’s Facebook wall that she was “snitching on people”, “too busy sucking up” and was “the kind of person who leaves your mates in the trenches after they have saved your ass.”
Ferronato reported this post to Facebook and to TSV, which then obtained screen shots of some of the Facebook posts.
TSV conducted an investigation and found Jurecek had engaged in misconduct and gave her a final warning
Jurecek made a claim to the Victorian Civil and Administrative Tribunal on the basis that her personal and private information had been obtained by TSV in contravention of the Information Privacy Act and claimed the Facebook chats were ‘personal information’.
However, VCAT found while the information from Facebook was not publicly available information the collection of the screenshots was part of TSV’s investigation into misconduct.
VCAT found obtaining the information “did not involve illegally ‘hacking’ into [Jurecek’s] Facebook page” and that there was no breach of Jurecek’s privacy.
Anthony Massaro, employment lawyer at Russell Kennedy, told SmartCompany
privacy law does not automatically shield an employee from a misconduct investigation, whether that is on Facebook or anywhere else.
“Generally if information is collected for an appropriate purpose in a lawful and reasonable manner then an employer can use that for that purpose without breaching privacy law,” he says.
Massaro says the tribunal accepted it was necessary for TSV to collect certain information from Facebook to investigate misconduct allegations.
“It was collected for that purpose and used for that purpose so there is no breach of the Information Privacy Act,” he says.
“Complications can arise when an employer obtains information for one purpose and wants to use it for another purpose or obtains it inadvertently.”
Massaro says if information becomes available about Facebook posts employers can look into it.
“What you can’t do is hack into someone’s Facebook account,” he says.
“That will be where you will be clearly collecting it unlawfully or in an improper manner.”
Janet Miller, spokesperson for Transport Safety Victoria, told SmartCompany there was an allegation of breach of privacy and TSV vigorously defended itself in VCAT.
SmartCompany was unable to contact Jurecek.
RealAs has received a second defamation threat over the property startup’s claims it can show which agents are inaccurately quoting house prices – this time from McGrath Estate Agents, the company founded by Shark Tank judge John McGrath.
Chief executive Josh Rowe confirmed to SmartCompany this morning RealAs received a letter from lawyers representing McGrath Estate Agents on Monday, dated May 14, asking RealAs to take down a blog post naming some of McGrath’s offices as Victoria and New South Wales’ most inaccurate agents.
The letter follows a defamation threat from Stockdale & Leggo over a Channel Nine News report on underquoting posted on the RealAs website and featuring the Stockdale & Leggo logo.
SmartCompany exclusively published data on Tuesday that RealAs claims proves its argument some Stockdale & Leggo offices had been off on the price publicly quoted versus the price a property sold for by as much as 30%.
Stockdale & Leggo agents subsequently hit back at the claims, saying the state of the booming property market was leading to unexpectedly large sales and asserting some of the data produced by RealAs was inaccurate.
According to Rowe, the letter received from McGrath Estate Agents claimed the blog post defamed the agent by listing their offices as some of the most inaccurate. It gave RealAs 24 hours to take down the post or face legal proceedings.
However, Rowe says McGrath, which is believed to be preparing to float on the Australian Securities Exchange, has not yet initiated those legal proceedings.
“It is not possible to sue for defamation in the case of a company,” Rowe told SmartCompany this morning.
“Equally, if they were to try to link it to a person, our defence is that we have properly ascertained facts and have data behind us to demonstrate those facts.”
“For a company that is about to list on the stock exchange, this is perhaps more distracting.”
Rowe says the information published in the blog also names four McGrath agents as some of the most accurate in the country, and claims one agent even tweeted that result after it was published.
Geoff Lucas, chief operating officer of McGrath Estate Agents, told Fairfax the suggestion by RealAs that its agents “are unscrupulous and intentionally bait homebuyers with unrealistic prices to create a sense of demand” was unacceptable.
"We are offended by that suggestion and as a company take great pride in our reputation both within the industry and with our clients who are selling and buying property,” said Lucas.
“As a consequence we are considering our legal position."
SmartCompany contacted McGrath Real Estate but the company declined to comment further.
Rowe says it was never his intention to vilify any agents, despite admitting there had been increased media attention on the disruptive algorithm used by RealAs, which claims to predict house prices.
“We never set out to make fun of or belittle agents. Our intention was to give the homebuyers – and our customers are homebuyers – the right information to buy a house sooner,” he says.
“If, in the course of that, it uncovers a variation in what real estate agents are quoting, then so be it… By us giving better, transparent information, buyers are more informed.”
Meanwhile, Stockdale & Leggo have released a statement in response to media attention on “under quoting”, saying the agency operates within the strict confines of the Estate Agents Act and is “bound by robust professional standards that effectively protect consumers involved in property transactions.”
“It is stating the obvious to say that we cannot control nor can we regulate buyer behaviour on the day of purchase and often there is a significant gap between our expectations on price and the final price achieved after a selling campaign,” said Stockdale & Leggo chief operating officer Anna Thomas in the statement.
“Therefore, this notion of perceived ‘under quoting’ seems to have become prevalent; when this phenomenon is more to do with the end selling price being a reflection of the greater market forces at play.”
South Australian dairy producer Fleurieu Milk Company is celebrating the return of one of its biggest contracts, after the business won back the supplier deal it walked away from last year in the face of a halal hate campaign.
Fleurieu Milk Company was the target of an organised social media attack by a network of anti-Islam groups in November, forcing it to abandon its halal certification and in turn drop its deal with airline Emirates, which was worth around $50,000.
The business was the subject of abusive comments and boycott threats, leading the company to believe the Emirates deal – which required Fleurieu Milk Company to ensure no pork, blood or alcohol got anywhere near the production process – was “not worthwhile”.
But speaking to SmartCompany this morning, Fleurieu Milk Company sales and marketing manager Nick Hutchinson said the company quickly realised it had made the wrong decision.
“We sat down as a management and leadership team and went through pros and cons,” Hutchinson says.
“We talked to a lot of people we respected, other business owners and politicians, and decided we had made a rash decision.”
“We didn’t want to be perceived in a manner and be associated with these boycott halal and anti-Islam groups, so we made the decision to become halal [certified] again.”
Hutchinson says the deal was of major importance not only because Emirates purchase a significant amount of dairy product from Fleurieu Milk Company, but also because it opens the company up to international and tourism markets it may otherwise not have access to.
But Hutchinson says critics of halal-certification have continued to mount a campaign against the company’s decision.
“There has still been a lot of heat, without a doubt, but there has been support as well. We decided at the end of the day it was the right decision, we decided to make a stance,” he says.
Hutchinson also welcomes the recently announced Senate inquiry into halal certification, pushed for by South Australian Liberal Senator Cory Bernardi, so that the issue “can finally be put to bed”.
“It will give us the exact answers to refer to,” says Hutchinson.
So far two third-party submissions to the inquiry have been published on the inquiry website, one advocating for religious food certification to be free and the other, by Florence Corneloup, slamming halal as a “scam”.
“I would like very clear labeling so I can choose not to support a death cult,” said Corneloup in her submission.
But Hutchinson says halal certification is incredibly important for many Australian businesses and the economy.
“Halal certification helps contribute tens of millions back into country’s economy through export and the like. For us to continue to grow the economy, it is hugely important,” he says.
A security contractor in regional Queensland has been penalised $90,000 by the Federal Circuit Court in Brisbane after failing to back-pay four employees nearly $10,000.
The operator of Mordel Pty Ltd, Douglas Kidd, was fined $15,000 for failing to pay four security guards for short periods of work completed in 2013.
His company, which trades as Spartan Security Group, was also whacked with an additional $75,000 penalty as a result of legal action by the Fair Work Ombudsman.
The business has been ordered to pay the former employees a total of $9704, with one employee owed more than $4000 for about three weeks’ work.
The employee watchdog took legal action against Spartan Security Group after it failed to adhere to two compliance notices issued by Fair Work inspectors, which ordered two of the employees to be paid.
Subsequent investigations found record-keeping laws were also breached by Spartan Security Group.
Sarah Lock, principal consultant at Workplace Law Specialists Brisbane, told SmartCompany this case is another example of an SME being brought to its knees because of non-compliance.
“In this particular case these underpayments seem not to be just a case of a genuine mistake, oversight or the owner not knowing the law,” she says.
“As we all know, ignorance of the law is no excuse. The compliance notices issued by the Fair Work Ombudsman are a much better and cheaper alternative to fixing a problem than going to the time and expense of fighting this in a more formal setting.”
Lock says it is essential that business owners make every effort to inform themselves of the rights of their employees.
“There are a number of options that business owners can access to ensure workplace compliance,” Lock says.
“Audit employment contracts and letters of employment, calculate the correct hourly rate and classification under awards using the Fair Work Ombudsman’s pay calculator, and partner with a good law firm or consultancy that specialises in employment law. They will work with you to provide a more robust framework to give you the checks and balances required to minimise the financial fallout from lack of compliance and understanding of the legislative minefield.”
Fair Work Ombudsman Natalie James said in a statement the court’s decision sends a strong message to employers who fail to pay employees correctly.
“Legal actions such as this also assist employers who are doing the right thing by their employees, because it helps them to compete on a level playing field,” she said.
SmartCompany contacted Spartan Security Group but did not receive a response prior to publication.
Dishonest real estate agents that publicly quote a price they know to be significantly less than what a property is worth are the target of a new raft of legislation to be introduced in New South Wales.
Victor Dominello, the state’s minister for innovation and better regulation, has flagged a crackdown on “underquoting” and says he will push forward on an election promise to regulate agent’s quoting behavior through a package of reforms.
Speaking to SmartCompany, Dominello says the government needs to take a stand against the backdrop of a booming Sydney property market.
“I can safely say, when you have a very rampant property market like we have now, it tends to lend itself to extreme prices and extreme practices, and under quoting is a function of that,” Dominello says.
“But when consumers are being abused financially in this way, it’s our responsibility to act.”
The minister’s move comes as property startup RealAs, which claims to hold agents accountable for inaccurate quoting, this week was the subject of multiple defamation threats from agents McGrath Estate Agents and Stockdale & Leggo.
Via a blog post and a video on its website, RealAs claimed and inferred both agents had been significantly off on the price they had been quoting on certain properties publicly versus the price it actually sold for.
The posts led to legal threats from both agents, arguing the claims are incorrect and defamatory.
Speaking to SmartCompany, Dominello weighed in on the debate saying RealAs and other startups that claim to disrupt the real estate space are just another way consumers could become more informed.
“The Australian consumer is very sophisticated, they have a very good capacity to look at data on their own and analyse it and make an informed decision,” Dominello says.
“Where there’s a RealAs or a TripAdvisor or an Urbanspoon, people can go out and make comments, some will be complimentary and some will be horrendous.”
“It all forms part of a big picture, and I say we should never shy away from providing the consumer with more information and never underestimate how intelligent the consumer actually is.”
If passed, the NSW government’s proposed legislation will see a package of changes introduced, including:
Dominello says recordkeeping will be key to defining which agents have made an honest mistake and which are trying to act inappropriately. He says records, such as an agent’s commission sheet, will be a clear line of defence for liability.
“In a hot market, there are a lot of examples of where agents do the right thing with their hand on their heart and say, ‘I believe this property will sell for $1 million’. They have discussions with the vendor and say it will sell for $1 million and they advertise it at $1 million, but because the market is hot, it hits $1.2 million,” says Dominello.
“We are not really concerned with variations that are honest. We are trying to focus on an intervention where there is dishonesty.”
“Where they say, ‘let’s set the reserve at $1 million, but let’s go out and say we’ll take offers from $800,000 to try and increase the amount of people who turn up at the auction’. Then the price goes well beyond that. That’s inappropriate conduct.”
But Dominello believes current allegations of an increase in underquoting do not taint the reputation of the broader real estate sector, which he says is an ‘important cog’ in Australia’s economic wheel.
“Anyone can point to any industry at any given point and say there is a problem,” he says.
“But there is an issue and we as a responsible government will work through it to protect the consumer.”
Carmaker Fiat Chrysler Australia has accused its former chief executive, Clyde Campbell, of misappropriating more than $30 million to fund his extravagant lifestyle and claimed he fraudulently gave cars away to celebrities for free.
Fairfax reports the car company has filed a lawsuit in the Federal Court alleging Campbell directly or indirectly used corporate funds to pay for a $400,000 yacht, a plane, trips to New Orleans and Rio de Janeiro, Victorian Racing Club memberships worth $244,800, and more than $380,000 in gift vouchers.
It is also alleged Campbell provided free cars to celebrities, such as Shane Warne, Elizabeth Hurley and Harry Kewell, when they were not official ambassadors for the brand, in breach of company governance.
Fiat Chrysler this morning confirmed to SmartCompany the carmaker had discovered what appeared to be “incomplete documentation pertaining to certain transactions and vendor relationships” by Campbell during his time as chief executive, during a routine audit.
“As such, we are seeking all relevant information he has on these matters,” Fiat Chrysler said in a statement.
According to the reports, Campbell allegedly hired a digital marketing company named Motortrak – a business Campbell is alleged to have previously held a senior role with – to provide "web services" for Fiat Chrysler. Fiat Chrysler claims more than $20 million was paid to Motortrak since 2011.
Fiat Chrysler also claims Motortrak invoiced the company for the purchase of Jeep and Chrysler cars for brand ambassadors Warne, Hurley and Kewell in the United Kingdom, “without any evidence of written contracts" with the stars and despite the fact the company had "no commercial presence” in the UK.
Fiat Chrysler is reportedly seeking compensation and a declaration by the Federal Court that Campbell breached his fiduciary duties, acted in bad faith and improperly used his position.
Campbell’s lawyer Sam Bond told Fairfax he denied the “scandalous” allegations.
Meanwhile, fresh allegations emerged last night that Veronica Johns, who took over from Campbell as Fiat Chrysler’s chief executive in 2014, also misappropriated funds from the company, according to Fairfax.
Fiat Chrysler has lodged further documents with the Federal Court alleging Johns used Fiat Chrysler’s money for her own home renovations and gave cars intended for charity purposes to her husband and the owner of the company undertaking the renovation work.
Brett Warfield, chief executive of fraud investigations firm Warfield and Associates, told SmartCompany the string of allegations could suggest an issue with company culture.
“A one-off case, you can’t do much about,” says Warfield.
“But you’ve got to question the recruitment process for these senior positions and you’ve got ask yourself what sort of due diligence or regular checks and balances are in place, when there is multiple cases.”
Warfield says cases of fraud involving chief executives are hard to detect because there is limited checks on someone with the “ultimate power” in the top job.
He suggests one of the best ways to guard against such fraudulent behaviour is by having solid whistleblowing policies, where staff can bypass the chief executive to inform the board of any concerns.
Warfield says in this case, there must have been “alarms bells ringing” for anyone who worked in the marketing department and were signing off on free cars without contracts.
He says ultimately, business must establish independent review processes and have multiple staff sign off on payments of contracts.
As the matter is before the courts, Fiat Chrysler said in its statement it could not make any further comment.
SmartCompany contacted Bond and Arnold Bloch Leibler, the firm representing Fiat Chrysler, but did not receive a response prior to publication.
The founders of Deals.com.au, owned by AussieCommerce have settled a legal dispute with a former employee who accused founders Adam Schwab and Jeremy Same of misleading and deceptive conduct in a partial sale of the business in 2013.
AussieCommerce has agreed to pay its former national sales manager, Adam Glezer, $1.96 million to settle the proceedings he filed in October last year.
The settlement offer was formalised on Thursday at the Supreme Court of Victoria.
The proceedings centred on a claim by Glezer that he was misled when he agreed to sell his 19.8% stake in Deals.com.au to Schwab and Same for $282,000.
Glezer claimed the true value of his stake was about $40 million and sought this or the return of his shares in the company.
He also initially claimed Schwab and Same said they would “f—k him over” and “bleed him dry”.
Schwab and Same denied this claim and documents tendered in evidence by Glezer to the court and provided to SmartCompany show Schwab actually said “we could f—ck you if we wanted but we want to find a fair way to get everything sorted”.
AussieCommerce was a finalist in SmartCompany’s Smart50 last year recording annual turnover of $138 million.
Schwab told SmartCompany he is happy with the settlement.
"While we were confident of being successful at trial, given the legal costs
and distraction from running the business, it made more sense to settle the
matter at this time," he says.
With the litigation settled there is now no barrier to AussieCommerce proceeding with an initial public offering.
Last year the online business appointed Macquarie Capital to help it prepare for an IPO with a proposed valuation of $200 million.
However, Schwab told SmartCompany an IPO was not confirmed and if it was, the legal dispute was never going to stop it.
“We are considering an IPO as we are considering all other options,” he says.
“It comes down to how we perform and how the market performs, we are not that desperate either way.”
Glezer declined to comment to SmartCompany but his lawyer, Jarrod McPherson of Sackville Wilks, confirmed Glezer would receive $1.96 million in addition to the $282,400 previously paid and any costs ordered.
A Perth-based businessman will front the Federal Circuit Court in Adelaide on June 3 after being accused by the Fair Work Ombudsman of underpaying two Taiwanese backpackers working as hairdressers nearly $40,000.
The case comes after two hairdressing businesses in New South Wales were hit with a total of $39,480 in penalties by Federal Circuit Court in Sydney during March, after failing to cooperate with the ombudsman.
In the most recent case, the FWO claims two Taiwanese backpackers, who were in Australia on 417 working holiday visas, were underpaid $19,767 and $19,377 respectively between September 2013 and May of last year.
The FWO claims the pair were employed by Perth businessman Wei Wang, who part-owns and runs the F10 Quick Cut outlets at the Arndale Shopping Centre in northwest Adelaide, and the Elizabeth Shopping Centre in the city’s outer-north.
Another company Wang is the sole director of, called Sonisolar Pty Ltd, has also been named in the legal action.
The hairdressers allegedly worked for six days a week at a rate of $10.50 an hour. However, under the Hair and Beauty Industry Award, the employees were entitled to $17 an hour for normal hours and penalty rates of up to $38 an hour.
Wang and Sonisolar are also accused of failing to comply with two notices to produce employment records from FWO inspectors, as well as record-keeping and pay-slip violations.
In a statement, Fair Work Ombudsman Natalie James said the case was launched after Wang declined to co-operate with investigators.
“Our inspectors made repeated efforts to engage with this business operator to try to resolve the underpayment matter outside the court, but were not able to secure sufficient co-operation,” James said.
Wang was contacted by SmartCompany this morning but declined to make any comments about the matter before it goes to trial.
Employment lawyer Peter Vitale told SmartCompany 417 visas have been an ongoing issue of concern for the FWO.
“I don’t think the FWO has changed its focus on the exploitation in Australia of employees on visas,” Vitale says.
“To be fair, they’ve been very consistent in their focus on that. And, especially for people whose command of English isn’t good, or who are young, that their employers aren’t taking advantage of them.”
Vitale also says if the FWO begins investigating your business, the best course of action is to comply with the investigations.
“I think if you’re at the point where the FWO is investigating an employer, it’s the best course of action for two reasons. The first is, if you’re doing the right thing, you should be able to avoid any legal action,” he says.
“And the second thing is that if you’re not complying with your obligations, a little cooperation can go a long way to reducing your penalties.”
“And as we’ve seen in this case, showing a willingness to make up for past underpayments might also be a way of avoiding legal action.”
A former credit representative of Aussie Home Loans has pleaded guilty to three charges in relation to a $7 million home loan fraud.
Shiv Prakash Sahay pleaded guilty in the Downing Centre Local Court in Sydney to making 13 false statements, making 23 false documents and using 26 false documents, following an investigation by the Australian Securities and Investments Commission.
The first charge carries a maximum penalty of five years prison, while the charges relating to making and use false documents each carry a maximum penalty of 10 years in jail.
The charges come just one day after ASIC revealed a former mortgage broker in Adelaide is facing 12 charges over an alleged $12 million Ponzi scheme, as the corporate watchdog continues to target home loan fraud.
ASIC said in a statement today its investigation found Sahay made false statements in loan applications and created and used false bank statements for 17 clients between November 14, 2011 and August 6, 2013 in an attempt to secure home loans totalling approximately $7 million.
ASIC said Sahay submitted the applications on behalf of his clients to Bankwest and Suncorp Metway Limited.
Of the $7 million in loans that Sahay applied for, more than half, or $4.796 million, were approved.
As a result, a company controlled and owned by Sahay called Ask Consultancy Services received more than $5500 in upfront commissions, as well as ongoing commissions of an unspecified amount.
Sahay was expelled from the Mortgage & Finance Association of Australia in February 2014 and will next appear in court on July 7.
ASIC deputy chairman Peter Kell said in the same statement ASIC is targeting loan fraud and “will continue to remove brokers and other credit representatives who engage in fraudulent activity from the lending industry”.
“The credit laws are designed to protect borrowers from loans they cannot afford,” Kell said.
“ASIC will act against dishonest mortgage brokers who flout the law for their own financial gain with little regard for the interests of their clients.”
Since becoming the national regulator of consumer credit in 2010, ASIC has banned 31 individuals or companies in relation to loan fraud, including 15 permanent bans.
The regulator has also obtained convictions in six criminal actions, with another four criminal cases currently before the courts.
SmartCompany contacted Aussie Home Loans but the company declined to comment.
Andrew Morgan, forensic services partner at BDO Australia, told SmartCompany while the vast majority of operators in the home lending market are “doing a great job”, he commends ASIC for taking decisive to protect vulnerable consumers and small businesses that can get caught up in the “food chain” of messy fraud schemes.
Morgan says each state and territory historically operated under its own consumer credit laws but the ASIC has taken over those powers and is now taking a “much more considered and consolidated approach” to tackling fraud.
And Morgan says ASIC will be keeping a particularly close eye on operators in the property sector because of the strength of the market.
“The industry is wired hot,” he says.
“It’s a very liquid market at the moment with a lot of money in it … so there is a massive incentive [for fraudulent activity.”
An admin officer for the Tasmanian police who claimed her pre-existing genital pain was aggravated by “aggressive and bullying behaviour from another worker” has lost her claim for worker’s compensation in the Workers Rehabilitation and Compensation Tribunal of Tasmania.
The worker, identified as Ms L Mackey in court documents, was employed as a clerical support officer at the Tasmania Police Academy in the Hobart suburb of Rokeby when she made the complaint in September last year.
She provided her employer, the Department of Police & Emergency Management, with a worker’s compensation certificate from her doctor, which stated her condition arose after “a work colleague became aggressive towards her during the course of her usual duties and then submitted a complaint about her”.
The incident occurred after the worker was directed to perform an administrative task by her co-worker. She felt the request was unreasonable and said she wanted to discuss it with her boss.
During the exchange, Mackey said her co-worker acted “belligerent, aggressive and intimidatory” and seemed “enraged”. She subsequently reported her pre-existing vulval pain restarted the day after the incident.
Among papers provided to the police department was a medical report from the worker’s gynaecologist, Dr Warren Kennedy, which stated Mackey had previously had surgery on her vulva for a Bartholin cyst and that her post-operative course was complicated by the development of neuralgic pain.
Kennedy said Mackey had made a slow but steady recovery until the event at work, which Mackey described as “being bullied by a work colleague.”
In the documents, Kennedy said he had “no doubt that the recurrence of her pain is related to the stressful event that occurred in the workplace”.
But the department denied liability, arguing the worker's employment wasn't the most significant contributing factor to her injury, that the conversation between the worker and colleague was civil, and that the language used by the colleague wasn't offensive or threatening.
Commissioner Rod Chandler favoured the evidence given by the co-worker regarding the exchange and threw out the claim on the basis that, if the matter were to proceed to a contested hearing, it would be likely Mackey’s colleague's actions would be considered reasonable.
“Such a determination may lead to the employer avoiding liability for the worker’s claim because the factual basis for the diagnosis of her aggravated vulvodynia could not be made out,” said Commissioner Chandler.
Jennifer Wyborn, workplace lawyer and partner at Clayton Utz, told SmartCompany the case was a reminder to employers to keep good records and file notes of workplace interactions with their staff, particularly where there is a complaint or dispute as to the behaviour of one particular individual.
“The key thing is to ensure you have accurate records, that you make sure medical evidence is up to date, and communicate with your employee in relevant and clear manner,” Wyborn says.
Wyborn says employers do have an obligation to reasonably accommodate injuries in the workplace and take all bullying complaints seriously, even if at first they appear bizarre.
“It does show there are a raft of avenues an employee can take to deal with issues,” she says.
“Good record management early on in the complaint process will save a lot of pain should the issue come before an external body for determination.”
The Department of Police and Emergency Management released a statement to SmartCompany that said it was inappropriate to comment on the matter as it was still current and before the tribunal.
An Australian juice manufacturer and a supermarket supplying its products have been slapped on the wrist by the competition watchdog for allegedly misleading consumers with false advertising.
Supabarn Supermarkets and The Real Juice Company have both paid $20,400 fines to the Australian Competition and Consumer Commission for labels on apple and cranberry juice suspected of contravening Australian Consumer Law.
The apple juice claimed to be produced using “the freshest quality apples” and “made in Griffith” despite being made from reconstituted apple juice imported from China.
The offending labels left a bad taste in the ACCC's mouth.
The cranberry juice product, meanwhile, claimed to contain no added sugar, artificial flavours, colours or preservatives when it in fact contained sugar and other additives.
The Real Juice Company manufactured and supplied nine flavoured juices to Supabarn under a private label from at least January 2014 to March this year; however, both companies stopped supplying the products following enquiries by the ACCC.
Melissa Monks, special counsel at King & Wood Mallesons, told SmartCompany it was interesting to see the competition watchdog target both the manufacturer of a product and the retailer.
“The commission tends to take action against the manufacturer, so the retailer might have been much more involved in the marketing in this case,” Monks says.
“It highlights how important it is that retailers can’t be complacent – they really need to make enquiries about the stock they’re getting and whether the claims can be substantiated. They can’t be wilfully blind to the product they’re stocking.”
Monks says it is important that companies are aware of previous action taken by the ACCC as there are “very clear enforcement examples” in the past – especially relating to claims around Australian-made or fresh food.
“Fresh is a danger word because marketers want to use it but they need to be very clear about when they can,” she says.
“You see it on so many packages now… from my experience so many clients are itching to use it but we’ve had very clear parameters set on how to use that term in the Coles fresh bread case. It’s a sensitive area and you have to be very careful in the claims you’re making and have the materials to back it up.”
ACCC chairman Rod Sims said in a statement truth in advertising is a “priority area” for the competition watchdog.
“Consumers should be able to make informed purchasing decisions and not be misled regarding the composition of products,” Sims said.
“The claims we say were made versus the reality in this situation are very concerning, particularly given recent controversy over the source of some food products. In addition, false or misleading claims of this kind not only mislead consumers, but can also disadvantage competing suppliers in the market, especially those who are using Australian grown fruit.”
Sims also pointed out businesses at each level of the supply chain are responsible for not misleading consumers through false or inaccurate advertising.
“Both manufacturers and retailers can be responsible for representations made on packaging or labelling of the products they supply, and each level in the supply chain should have systems in place to ensure that their products are compliant with the Australian Consumer Law,” he said.
A spokesperson for Supabarn said in a statement to SmartCompany the company cooperated with the competition watchdog and acted swiftly to remove the offending products from its shelves.
“Once it was aware of the problem Supabarn immediately withdrew the product from its shelves and fully cooperated with the ACCC,” the spokesperson said.
“At no time were Supabarn made aware of the contents of the juice by Real Juice.”
SmartCompany contacted The Real Juice Company but did not receive a response prior to publication.
Health tracking company Fitbit has been accused of “systematically plundering” employees from a rival business in order to access trade secrets and intellectual property.
However, Fitbit denied the allegations to SmartCompany this morning, saying it will “vigorously” defend the claims.
Jawbone, which also manufactures wearable technology products, filed a lawsuit in the California State Court yesterday alleging there had been a “carefully orchestrated plan” by Fitbit to undercut its chief competitor.
The legal action comes as Fitbit, which was founded in 2007 by software engineers James Park and Eric Friedman, plans an initial public offering which is expected to take place later this year.
Since its launch Fitbit has sold millions of wristbands in 54 countries and swelled to 700 employees.
Jawbone’s lawsuit alleges Fitbit contacted around 30% of its workforce, with at least five employees choosing to jump ship and take with them an “intimate knowledge” of Jawbone’s future products and business strategy.
“But, as Fitbit well knows, the law prohibits companies from ‘decimating’ their competitors through the theft of confidential, proprietary information,” the lawsuit reads.
“The defendants must now be held accountable for their unlawful conduct and the substantial, and in many respects irreparable, harm inflicted on Jawbone.”
Jawbone alleges in the days, weeks and months leading up to the employee departures, several new additions to Fitbit’s team downloaded business plans and confidential presentations from their work computers.
The company says “forensic analysis” revealed the former employees downloaded these documents – which included information about Jawbone’s supply chain, gross margins and future products – onto USBs and forwarded them to their personal emails for future use.
Jawbone also says it has uncovered steps taken by its former employees to “cover their tracks” with activity-concealing software.
The company is seeking compensatory damages as well as legal fees.
But Fitbit has denied any wrongdoing, with a spokesperson for the company telling SmartCompany this morningthe business has no need to take information from Jawbone or any other company.
“Since Fitbit’s start in 2007, our employees have developed and delivered innovative product offerings to empower our customers to lead healthier, more active lives,” the spokesperson says.
“We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations.”
SmartCompany contacted Jawbone but did not receive a response prior to publication.