Leading Australian hearing clinic pays penalties for misleading customers

28 September 2018

Australian Hearing Services has paid penalties totalling $37,800 after the ACCC issued three infringement notices alleging the Australian Government owned corporation engaged in false or misleading conduct in connection with the supply of hearing services to consumers.

The ACCC also accepted a court enforceable undertaking from Australian Hearing, which has admitted that its conduct breached the Australian Consumer Law.

Australian Hearing competes with other hearing clinics to provide hearing services to consumers under the Australian Government Hearing Services Program. It owns and operates Hearing Help, a service that provides hearing advice to consumers by phone or via Facebook.

Australian Hearing has admitted that it:

  • engaged in misleading conduct by representing that Hearing Help is “unbiased” in circumstances where Hearing Help is owned and operated by Australian Hearing and one of its primary objectives is to increase consumer referrals to Australian Hearing
  • falsely represented that Hearing Help was government funded.  Hearing Help is entirely funded by Australian Hearing which largely operates on a ‘for profit’ basis in competition with other hearing clinics
  • sent renewal reminder letters to clients of the Australian Government Hearing Services Program that falsely represented that payment for annual subscriptions for maintenance services for hearing aids was mandatory when it was not. Consumers pay a fee of around $50 for these subscriptions and providers like Australian Hearing receive a subsidy of around $75 to $200 for each customer they sign up.

“This is the second time we have acted recently against a hearing services provider after we put the sector on notice in 2017 about concerning business practices in the industry,” ACCC Commissioner Sarah Court said.

“Hearing clinics need to ensure that they are not misleading customers in order to sell hearing aids. Hearing clinics must be truthful in the way they promote and deliver their products and services, whether in their advertising materials or in their direct communications with consumers.”

“The customers of these businesses are often vulnerable due to their hearing loss or age, and are often on a pension. We will continue to take enforcement action to protect vulnerable consumers where we see wrongdoing,” Ms Court said.

As part of the undertaking, Australian Hearing has also committed to publish notices on Facebook and in its next round of annual reminders to advise consumers of its misrepresentations. Australian Hearing has also undertaken to implement a comprehensive compliance program.

A copy of the undertaking is available at: Australian Hearing Services - Section 87B.

Notes to editors

Around 80 per cent of hearing aids supplied in Australia are provided under the Australian Government Hearing Services Program.

The Hearing Program is administered by the Department of Health. Around 300 providers, including Australian Hearing, are accredited by the Department of Health to provide hearing devices to voucher holders under the Hearing Program.

The Hearing Program provides access to subsidised hearing services and devices (via “vouchers”) to eligible persons, such as Pensioner Concession Card holders, veterans, and Australian Defence Force personnel. Vouchers can be used to obtain fully subsidised hearing devices, or to cover some of the cost of partially subsidised hearing devices, with the consumer paying the remainder of the cost directly to hearing clinics.

When a consumer obtains a hearing device under the Hearing Program, the provider will also generally offer the consumer an optional maintenance service agreement. This service is optional, but recommended by the Department of Health.

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