An Adelaide-based air conditioning ducting manufacturer is taking corrective action after making misleading comparisons with its competitors' products.
The Australian Competition and Consumer Commission has accepted undertakings from Heatshield Ductair Pty Ltd concerning false and misleading representations made about the energy efficiency of its flexible ducting products.
In November 2002 Heatshield Ductair engaged a university based research group to test the insulation aspects of its flexible ducting against a selection of its competitors' products.
Using the laboratory test results for a print and radio campaign through the summer of 2002-2003, Heatshield Ductair promoted the superiority of its ducting and represented, among other things, to distributors, installers, and customers that:
- its premium product had been tested against all of its competitors' premium products, whereas the tests were not so comprehensive
- each grade of its flexible ducting had the superior performance characteristics of its highest grade product, whereas each grade does not
- savings of $6,000 per installation are achieved by using Heatshield Ductair products instead of those of all competitors, whereas that saving could only be achieved against the products of lesser performing competitors; and
- a complete range of flexible ducting was tested, whereas some products were not tested.
Further, Heatshield Ductair made an incorrect representation on its price list about the insulation properties of its high grade flexible ducting product.
"The ACCC believed these representations were false and misleading in breach of the Trade Practices Act 1974", ACCC Deputy Chair, Ms Louise Sylvan, said today. "Heatshield Ductair acknowledges that in making the representations, it may have contravened sections 52, 53(c) and 55 of the Trade Practices Act 1974.
"In cooperating with the ACCC to resolve the matter, Heatshield Ductair provided court-enforceable undertakings to:
- cease making the false and misleading representations
- write to its customers and competitors, explaining what has happened and expressing their commitment to future compliance; and
- implement at its own expense a trade practices compliance program within the corporation designed to ensure that it does not contravene the Act in future.
"This case should alert traders that when they make comparison claims against competitors they should ensure that they have a proper basis for such claims and their evaluations are not distorted.
"Further, they should ensure beforehand that their understanding of the market is up to date and accurate".
The undertakings provided by Heatshield Ductair will shortly be available for inspection on the public register.