Warning on advertising – big penalties for misleading represenations
A recent article from ACCC earlier this month as the Federal Court in Brisbane has ordered Metricon Homes Qld Pty Ltd to pay $800,000 in penalties and $50,000 towards the ACCC’s costs after it agreed that some of its advertising and promotional material was false or misleading.
“Home building companies should take the penalties ordered in this case as a serious warning” ACCC chairman Rod Sims said.
“Photographs and glossy brochures that promote products should be of what the consumer will be supplied at the advertised price, not an upgraded package that would ultimately cost the consumer much more”.
In this instance, Metricon Homes had swimming pools and bali huts adjacent to the house, when they do not supply these features or include them in palcages to its customers but these features were not part of the package.
The other issue was their “Build Time Guarantee” that guaranteed build times between 14 – 24 weeks for houses it offered to supply, and that it would compensate purchasers for their rentla costs if the house was not completed in the guaranteed time. However, the Build Time Guarantee was subject to terms and conditions which meant that the guarantee did not automatically apply to the majority of houses offered during the said period.
So in essense, you just can never be too careful when putting together your marketing material to ensure that WYSIWYG (what you see is what you get) unless followed with warnings about inclusions and extras. No different to a house sale (and I can be guilty of this matter) when the buyer needs to see all chattels and fittings that are included in the sale, don’t just assume that the dishwasher or curtains will be there.