StoresOnline customers get $679,000 in refunds after ACCC legal action

2 February 2007

StoresOnline International, Inc. and StoresOnline, Inc., two US-based companies, have refunded $679,478.88 to 175 Australian customers after an Australian Competition and Consumer Commission legal action.

The refunds were paid to consumers who claimed to have been misled by representations made by StoresOnline in promoting its home business e-commerce software packages.

In June 2005, the ACCC instituted proceedings in the Federal Court of Australia alleging that StoresOnline had engaged in misleading and deceptive conduct, in breach of the Trade Practices Act 1974, at seminars and workshops held throughout the country.

The court granted ex parte orders:

  • preventing StoresOnline from transferring funds outside Australia until the finalisation of the legal proceedings, and
  • requiring StoresOnline presenters to warn prospective customers of the ACCC's legal proceedings.

The effect of the first order was that more than $650,000 was ultimately frozen pending the outcome of the ACCC litigation.

In May 2006, Justice Moore made orders to give effect to a settlement reached between the ACCC and StoresOnline. They required StoresOnline to:

  • pay refunds to customers who claimed to have been misled by certain representations made by StoresOnline
  • not make false or misleading statements about its website packages nor make statements about the future performance of the packages without having reasonable grounds for so doing
  • provide a three business day 'cooling off' period for future customers, and
  • contribute to the ACCC's legal costs.

In settling the proceedings StoresOnline did not admit that it had engaged in any conduct in breach of the Act.

Applications for refund as part of the May 2006 settlement closed in July 2006. All monies available for refunds have now been distributed and no further applications can be considered. After interest on the frozen funds was added, the total amount available for distribution to consumers was $679,478.88. This meant a refund of 94.4 cents in the dollar for each applicant or an average refund per consumer of over $3,800.

"In pursuing this outcome, the ACCC was mindful of getting a practical solution for StoresOnline customers who believed that they had been misled into buying StoresOnline's product," ACCC Chairman, Mr Graeme Samuel, said today.

"The ACCC believes that this is excellent outcome as all consumers who submitted a statutory declaration which complied with the terms of the settlement obtained a substantial refund which covered most of their outlay. Generally it is very difficult to obtain refunds for consumers from corporations which are located off-shore, such as StoresOnline. Quickly seeking and obtaining orders freezing funds paid to StoresOnline helped make this outcome possible."

Release number: 
MR 024/07
ACCC Infocentre: 

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