The ACCC is putting the caravan industry on notice that the use of misleading representations in advertising is in breach of the Australian Consumer Law and may result in strong enforcement action being taken against retailers.
A recent example identified by the ACCC involved ‘price certainty’ representations in which a small retailer told a number of customers the price of the caravan they ordered was fixed, but subsequently sought to increase the price (while also giving the customer an alternative option to cancel the contract).
The fixed price representation had also been made despite the contract allowing the retailer to pass on manufacturers’ price increases.
Another example of concern to the ACCC involved allegedly false or misleading representations regarding caravan weights which were not accurate.
The warnings follow ACCC investigations into the practices of several caravan retailers, and commitments from two smaller caravan retailers to improve disclosures to consumers and compliance with the Australian Consumer Law.
“Businesses must not mislead consumers about prices or contractual terms relating to pricing,” ACCC Commissioner Liza Carver said.
“Businesses must also ensure they do not mislead consumers about important features of a product, such as the weight, or tonnage, of a caravan.”
“We are concerned that several small and mid-sized caravan retailers may be failing to comply with their obligations under the Australian Consumer Law, and we will continue to investigate complaints and engage with retailers and caravan manufacturers to ensure compliance,” Ms Carver said.
“It’s important that businesses of all sizes appreciate they have the same obligations to consumers under the Australian Consumer Law as large retailers.”
The ACCC’s investigations follow issues in relation to the treatment of consumers and compliance with consumer law identified in the ACCC’s New caravan retailing report.
“Caravans are significant purchases for consumers and when things go wrong the harm can be significant. We received several complaints from consumers regarding caravans and carefully investigated the issues raised with us,” Ms Carver said.
The ACCC raised concerns with one smaller caravan retailer about price certainty representations, including where the price had subsequently been increased, and the retailer has now formally committed to not increase prices for relevant consumers.
The retailer has also removed these representations from its website and marketing materials, and committed to arrange training for its staff to improve compliance with the ACL.
The ACCC also engaged with another caravan retailer after concerns that the retailer was representing that the advertised weights of its caravans were the precise weights, when for some caravans they were only an estimated reference weight for similar caravans.
Misrepresentations of caravan weights can cause additional costs for consumers who may have to buy a more powerful towing vehicle, and may pose a safety risk if they unknowingly exceed safe towing limits.
The caravan retailer involved has committed to updating website material and developing improved guidance and processes to disclose key caravan weight information to consumers before sale, as well as providing options where actual caravan weights differ from caravan weight estimates.
Background
In July 2022 the ACCC released its New caravan retailing report that highlights key issues of concern in the market for new caravans and provides guidance to businesses about their obligations to comply with the Australian Consumer Law.
In November 2021, the ACCC released two surveys directed towards consumers and suppliers to better understand the issues they faced in the new caravan retailing market.
The ACCC received 2,270 relevant consumer responses and 67 supplier responses. The ACCC has also spoken directly with consumers, suppliers, industry associations and received feedback through industry forums.
In December 2021, the Treasury published a Consultation Regulatory Impact Statement (CRIS) on improving consumer guarantees and supplier indemnification provisions under the ACL. This included potential penalties for:
- a failure to provide a remedy where a business is legally required to do so
- manufacturers’ failure to indemnify suppliers, and
- retribution by manufacturers against suppliers who seek indemnification.
The ACCC has provided a submission to Treasury’s CRIS process advocating for the Australian Consumer Law to be amended to introduce these prohibitions.