The ACCC has accepted a court-enforceable undertaking from the National Australia Bank for breaches of the Trade Practices Act.
NAB breached the Act when promoting its Wheat Advance product in full-page advertisements which appeared in newspapers circulating in New South Wales, Victoria and Western Australia in November 2000.
Wheat advance payment schemes allow wheat growers to deliver grain to Australian wheat pools, receive funds in advance of the wheat being sold and have a minimum payment guaranteed.
The NAB advertisements made certain representations offering wheat farmers a better deal with a key feature including underwriting costs around 17.5% lower than its competitor.
"Of particular concern was NAB was aware for at least seven days prior to the publication of the advertisements that the representations offering wheat farmers a better deal were factually incorrect", ACCC Chairman, Professor Allan Fels, said today. "NAB failed to take any action either to correct the representations or have the advertisements withdrawn from publication.
"Price is a fundamental element of competition and is the basis of most consumer purchasing decisions. Comparative advertising can provide consumers with very useful information and enhance competition, provided that the comparison is accurate. In this case the comparison was not accurate. NAB knew that its underwriting costs were not 17.5% lower".
Rural and regional Australia have been hard hit in recent times and the ACCC is mindful that in difficult market conditions farmers may be vulnerable to unfair and illegal trading practices.
In accordance with the undertaking offered to the ACCC, NAB will implement a trade practices compliance program to ensure future breaches of the Act do not occur.