Australian Competition and Consumer Commission court action was finalised against Craftmatic Australia Pty Ltd and two former staff members after undertakings were given to the Court by former director, Ashley Day and orders were made.
On 14 October 2009, Justice Logan of the Federal Court, Brisbane made orders accepting undertakings from Mr Day not to engage in particular conduct for three years. The terms of Mr Day's undertaking are similar to injunctions ordered against Craftmatic and Wayne Lugg, a former staff representative.
Mr Day was also ordered to pay a contribution of $2,500 towards the ACCC's costs.
"Directors and employees will be held accountable for their actions, and in appropriate cases such as this one, the ACCC will take court action against individuals as well as the corporate entity," ACCC chairman, Graeme Samuel, said today.
The ACCC took action against Mr Day because its investigation disclosed that he was a director of the business at the time of the conduct admitted by Craftmatic. The company used misleading and unfair tactics to convince elderly people to accept an in-home presentation by one of Craftmatic's sales representatives. Many consumers were led to believe that the in-home presentation would simply involve seeing a Craftmatic bed that they were in the running to win.
On 19 June 2009, the Federal Court ordered by consent, injunctions for seven years restraining Craftmatic from engaging in a wide range of conduct that was declared to be misleading and unconscionable, in breach of the Trade Practices Act 1974.
Craftmatic admitted that its previous sales process had subjected senior citizens to unfair tactics and pressure to buy a bed, which cost up to $15,000. For the next seven years Craftmatic must also provide prospective consumers with relevant details about their rights. Mr Lugg had previously consented to court declarations and injunctions in respect of his involvement in the conduct and provided an affidavit to the court.
The ACCC investigation revealed that the in-home presentation consisted of an elaborate and well rehearsed sales process that was aimed to persuade the consumer to buy a Craftmatic bed, which on some occasions lasted up to three hours. While some consumers were happy to buy a bed, others who stated that they either didn't want or could not afford to buy a bed were subjected to a barrage of unfair sales techniques to change their mind.
"The ACCC is aware of complainants who said that they only agreed to buy a bed because they were put under so much pressure and they felt that buying a bed was the only way to get the representative to leave," Mr Samuel said.
Mr Samuel thanked the numerous senior citizens, their family or friends who informed the ACCC of their concerns about this conduct.
Consumers can contact the ACCC directly on 1300 302 502.