Franchising and misleading behaviour in ACCC’s sights

Nearly 5000 small businesses reported various issues to the ACCC last year, with the most common areas of concern being alleged misleading conduct, consumer guarantees issues and wrongly accepting payments.

The ACCC took seven enforcement actions, including five for alleged breaches of the Franchising Code. It also did 29 compliance checks to ensure adherence with the franchising, horticulture, and food and grocery industry codes.

The ACCC today launched its Small Business 2017 snapshot, which gives an overview of its activities within the small business sector in 2017.

“Small Business in 2017 gives a good overview of the issues the sector is raising with us, and the concerns that are likely to guide our activities throughout this current year,” ACCC Deputy Chair Dr Michael Schaper said.

“We worked hard in 2017 to protect small businesses to ensure they’re not being unfairly treated, with a number of important firsts. We secured $177,000 in penalties for misconduct towards small businesses, including the first court ordered penalties for breaches of the Franchising Code.”

“We also took our first court action to enforce the new laws that protect small businesses from unfair contract terms. We were successful in this matter, with the Federal Court declaring, by consent, the offending unfair terms void. We continue to investigate other potential breaches and have another matter currently before the Federal Court,” Dr Schaper said.

Scams continue to be a significant threat small businesses need to be on the lookout for. In 2017, nearly $3 million was reported lost by small businesses.

“Losing money to scams can be devastating to a small business and in some instances lead to them closing their doors,” Dr Schaper said.

Looking ahead to the rest of 2018, Dr Schaper said small business can expect the ACCC to continue its work in relation to business-to-business unfair contract terms. There will also be a particular focus on Franchising Code of Conduct issues involving large or national franchisors.

“The majority of small businesses that contact us are micro sized with less than four staff. We want small businesses to have a level playing field and every chance to succeed, so it’s our job to ensure everyone plays by the rules,” Dr Schaper said.

“The competition & Consumer Act provides a range of protections for small business, as well as some responsibilities. The ACCC is committed to working with Australia’s 2.2 million small firms to help make sure they know these.”

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