Businesses must be completely transparent to consumers, says ACCC

The Australian funeral services sector has attracted the attention of the ACCC for all the wrong reasons. Propel Funeral Partners Ltd (Propel), a publicly listed company, has been ordered to pay penalties for misleading consumers about the ownership of its funeral homes.

Two Propel-owned funeral homes, one in Taree and another in Townsville, have been openly marketing themselves as being “proudly local and independently owned” and “…locally owned and operated”.  While this may have been true before Propel’s acquisitions in 2015 and 2019 respectively, the funeral homes were advertised in this way after the large Sydney-based company took over.

Understandably, and especially in light of the economic impacts of COVID-19, consumers often make a conscious decision to favour local businesses and support the local economy. As consumers, we are often encouraged to “shop local”. It is unsurprising that the ACCC picked up on the misleading activities of Propel given its priorities. This year, the ACCC’s enforcement and compliance priorities include:

  • consumer rights related to the promotion and sale of products in the context of the COVID-19 pandemic;
  • competition and consumer issues in the funeral services sector; and
  • competition and consumer issues relating to digital platforms.

Lessons to be learned

ACCC Deputy Chair Delia Rickard has emphasised how important it is for businesses to have systems in place to maintain their websites, promotional and marketing material with the most up to date and accurate information. This promotes transparency with consumers.

To avoid potentially breaching Australian Consumer Law (ACL) and misleading and deceiving consumers, businesses should:

  • regularly check to make sure the image they are projecting to the Australian public is current, accurate and complete;
  • substantiate, or be prepared to substantiate. their advertising claims;
  • check the overall impression to consumers is accurate and correct misunderstandings as soon as the business becomes aware of them;
  • use simple, easy to understand language to minimise the risk of consumer confusion; and
  • note important limitations or exclusions.

Penalties

The two funeral home businesses were issued with infringement notices by the ACCC and each required to pay $12,600 in penalties.

To avoid having to mitigate damage or retroactively try and right wrongs, businesses should adopt best practices which comply with the ACL and promote transparency. This can be achieved through up-to-date internal systems, policies and procedures.

The team at Griffin Legal can provide advice for your organisation regarding the ACL and the development of accurate policies and procedures.

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