Chubb bid for James Hardie Building Services not opposed

22 December 1996
Security industry leader, Chubb Security Australia Pty Ltd, has admitted to the Federal Court that it misled customers about the security patrol services for which it was paid. Refunds of about $500,000 will follow.

On 20 December 1996, Justice Lockhart of the Federal Court made consent orders against Chubb. The orders had been sought by the Australian Competition and Consumer Commission after an intensive investigation of Chubb's conduct. The ACCC alleged that Chubb had breached section 52 of the Trade Practices Act, which prohibits conduct which is misleading or deceptive, by:

  • contracting to make security patrol runs, but sometimes failing to provide them, even when there were no particular difficulties, such as unforeseen circumstances or very busy periods;
  • on occasions, instead of carrying out physical inspections as required, Chubb patrol officers would check premises by simply driving past them;
  • on occasions, Chubb told customers that contracted services had been completed when they had not;
  • on some occasions in the Newcastle area, Chubb's manager amended electronic data by entering references to security checks which had not been carried out, and by changing times recorded to fit with patrol times specified by customers.
The Court declared that Chubb had breached s. 52 by representing to customers that it had carried out mobile patrol services, which it had not provided. It also declared that s.52 had been breached by representations that Chubb would provide patrol services without having reasonable grounds for making the representations.

The Court also imposed three injunctions on Chubb. The first restrains it from misleading or deceptive conduct involving representations that it will provide mobile patrols when it has no reasonable grounds for making such representations.

The second injunction restrains similar conduct in Chubb's advertising. The third injunction restrains misleading or deceptive representations that patrols have been carried out when they have not been. His Honour ordered Chubb to pay ACCC legal costs and investigative costs. Chubb has also given a Court enforceable undertaking to the ACCC. This involves:

  • refunds or credits of $50 to most customers who have been, or were, with Chubb for more than three months; and $100 to such customers in the Newcastle area. Chubb's conduct was allegedly more serious in Newcastle. Refunds are likely to exceed $500,000; refunds do not apply in Western Australia, where earlier undertakings to the ACCC apply, or in Tasmania where Chubb only recently started operations.
  • Chubb will provide copies of documents, at Chubb's expense, to customers pursuing other remedies through Courts or Tribunals;
  • Chubb will send apology letters to all affected consumers.
  • Chubb will publish three quarter page public notices in national newspapers, and six public notices over three years, in a security industry magazine.
  • Chubb undertakes to introduce a Management Control Program, to carefully monitor patrol services. Chubb will automatically make refunds for patrols missed for reasons such as staff failings and poor scheduling of patrols.
  • each year, for three years, Chubb will report to the ACCC on compliance with its undertakings, numbers of patrols missed, and refunds made.
  • Chubb will implement a Code of Ethics for the administration of Patrol Services
  • Chubb will pay for an ACCC officer to address the next two conferences of ASIAL, the security industry's association.
  • Chubb undertakes to lobby for Australian Standard AS 4421 to be amended to require all security firms to run Trade Practices compliance programs, and to ensure accuracy of all representations about levels of service.
  • Chubb will also provide free security services for two years, to Newcastle's Fort Scratchley Maritime Museum, an historic site prone to vandalism.
Release number: 
MR 180/96
ACCC Infocentre: 

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