A Cairns based real estate agency has provided court-enforceable undertakings to the Australian Competition and Consumer Commission after the agency sent out letters to ex-tenants which the ACCC believed were possibly false, misleading and coercive.
Earlier this year, Khad Pty Limited, trading as the Professionals Edge Hill, sent out two letters to ex-tenants requesting payment for alleged debts. The letters also advised tenants that their name would be placed on a tenants information database. The letters made a number of misrepresentations about the effect of being listed on the database and specifically:
- that the data-base was worldwide, when it was not;
- that the listing would effect the tenant's credit rating where in fact the listing has no effect on the tenant's credit rating; and
- that the listing would result in future tenancy applications being denied through other agencies. Not all real estate agencies use the database and in any event, real estate agencies or landlords generally choose with whom they deal with regardless of the listing.
The ACCC was concerned that in sending the letters, the Professionals Edge Hill made false or misleading representations and may have engaged in undue harassment or coercion in relation to the payment for goods or services.
The Professionals Edge Hill has provided undertakings which include:
- admissions that in sending the letters it had made false or misleading statements, had engaged in harassment or coercion and was likely to have breached Trade Practices Act 1974;
- a commitment not to repeat the misrepresentations or to make misleading statements about the effects of failing to make any payment;
- a requirement to send corrective letters of apology to the two tenants; and
- the implementation of a trade practices compliance program.
The ACCC welcomes the provision of these undertakings and believes it is a positive step by the Professionals Edge Hill. The ACCC believes its cooperation has contributed to ensuring the problem will not be repeated and that the effected consumers receive an apology and correction.
"These undertakings serve as a timely reminder to all companies not to make false or misleading representations when collecting payment for goods or services", ACCC Chairman, Professor Allan Fels, said today. "Such representations have the potential to constitute harassment or coercion and may place the company at risk of breaching the Act".
The undertakings follow consent orders provided in Perth last month by Cash Return Mercantile Pty Ltd and Sharyn McCaskey in the ACCC's first case alleging harassment or coercion. In that case Justice French said that the recovery of unpaid debts can be pursued with firmness, determination and civility without resorting to bullying, bluff, misrepresentation or stand-over tactics. (See MR 216/00)
Useful examples of situations that may give rise to a contravention of the Act are set out in the ACCC guidelines, Debt Collection and the Trade Practices Act, that is available on the Internet at http://www.accc.gov.au and from all ACCC offices.