Mackay Chapman June 2024 ACCC Update

In this month’s ACCC update:

• Qantas agrees to $20m in remedial payments to customers and, subject to court approval, a $100m penalty for misleading consumers;
• GLAD bags manufacturer in court for '50% ocean plastic' claims;
• Scam losses decline, but more work to do as Australians lose $2.7 billion; and
• New laws to increase awareness of the dangers of toppling furniture.

Qantas Agrees to $20m Payments to Customers and a $100m Penalty for Misleading Consumers (subject to court approval)

Qantas is facing the consequences of misleading customers in relation to flights it sold but had already cancelled. 

The ACCC took Qantas to court for selling tickets to flights they had already cancelled and failing to promptly inform existing ticket holders about cancellations.  Qantas has admitted to this misconduct and agreed to a hefty penalty. They will pay a $100 million fine to the ACCC and an additional $20 million to compensate over 86,000 affected customers, provided the Court approves the negotiated settlement. This compensation applies to both domestic and international flights cancelled between May 2021 and August 2023.

The ACCC Chair sees this as a significant win for consumer protection. She believes the hefty fine sends a strong message to other companies about the importance of clear and honest communication with customers. 

Qantas has also agreed to implement stricter protocols to prevent similar situations in the future. This includes notifying passengers about cancellations within 48 hours and stopping the sale of cancelled flights within 24 hours of cancellation.

While the compensation will help affected customers, the incident has tarnished Qantas' reputation. The airline will need to rebuild trust with travellers by upholding transparency and clear communication in their future operations.

GLAD Bags Manufacturer in Court for '50% Ocean Plastic' Claims‍

The ACCC is cracking down on misleading environmental claims. They've launched legal action against Clorox, the manufacturer of GLAD garbage and kitchen bags, for allegedly deceiving customers about the recycled plastic content of their products.

The crux of the issue lies in Clorox's prominent use of "ocean plastic" on their packaging. The ACCC alleges that despite these claims, the plastic used wasn't actually collected directly from oceans, but rather from communities in Indonesia, up to 50 kilometres from the coastline. This, they argue, creates a misleading impression and undermines consumer trust.  The packaging itself also came under scrutiny, with the ACCC pointing to the "ocean plastic" statements, wave imagery, and blue colour scheme as all contributing to the misleading impression.

The ACCC Chair, Gina Cass-Gottlieb, emphasised the importance of accurate environmental claims. Consumers increasingly base purchasing decisions on environmental impact, and businesses must be held accountable for truthful advertising. This action reflects the ACCC's commitment to tackling "greenwashing" – the practice of misleading consumers about a product's environmental friendliness.

Clorox has since withdrawn the products in question from retailers.  The case highlights the need for clear and transparent communication when making environmental claims, particularly with growing consumer focus on sustainability.

Scam Losses Decline, but More Work to do as Australians Lose $2.7 Billion‍

A collaborative effort by the National Anti-Scam Centre and various organisations has yielded positive results. Australians reported a 13.1% decrease in financial losses due to scams in 2023, totalling $2.74 billion. However, scam activity remains high, with over 600,000 scam reports filed – an 18.5% increase compared to 2022.

Investment scams were the most damaging, causing $1.3 billion in losses, followed by remote access and romance scams. The report highlights the effectiveness of coordinated efforts in disrupting scam operations and protecting consumers.

While overall losses declined, the report reveals concerning trends. Older adults (over 65) were disproportionately affected, experiencing a 13.3% increase in losses to $120 million. Social media scams particularly impacted this age group. Text messages were the most common contact method, but phone calls resulted in the highest losses. Job scams also saw a surge, with losses rising 151.2%.

The National Anti-Scam Centre remains vigilant, emphasising the importance of data sharing and technology solutions to combat evolving scam tactics. It is committed to raising awareness and working with partners to make Australia a less lucrative target for scammers.

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New Laws to Increase Awareness of the Dangers of Toppling Furniture‍

Tragically, toppling furniture has caused deaths and injuries in Australia. To address this, a new mandatory information standard requires furniture suppliers to warn consumers about the dangers.

The standard applies to various furniture items like chests of drawers, bookshelves, and buffets taller than 686mm. Suppliers must provide permanent warning labels, safety information in manuals, and warnings in stores and online. This will raise awareness of the risks and encourage proper anchoring to prevent furniture tip-overs.

Consumers can also take steps to improve safety. Look for sturdy furniture with built-in drawer stops and a broad base. Most importantly, secure furniture to the wall using appropriate anchors to prevent accidents.

The ACCC offers guidance to furniture suppliers during the implementation period and warns of potential penalties for non-compliance. This initiative aims to significantly reduce deaths and injuries caused by toppling furniture.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.