Two retailers of solar panel systems have amended their marketing campaigns after the Australian Competition and Consumer Commission raised concerns that representations in their advertisements were likely to mislead or deceive consumers.
In court enforceable undertakings provided to the ACCC, Queensland Solar Systems and State Solar Services acknowledged that it was likely that they had contravened the Trade Practices Act 1974, because they had claimed:
- that consumers could 'wipe out' household electricity bills by installing a 1.5kw solar panel system, when a system of that size is not likely to generate sufficient electricity to eliminate an average household's electricity costs
- that the solar systems were available at heavily discounted prices, when they had never sold the systems at the higher prices or recommended retail prices (RRP) advertised, and
- that the discounts were only available during limited sale periods, when the systems were always available at discount prices.
QSS and SSS also did not make it clear in the advertisements that the discounts were only available to customers who were eligible for Federal Government financial incentives in the form of Renewable Energy Certificates.
ACCC chairman Graeme Samuel said that in cases such as these, the ACCC may in future use its new enforcement power to issue substantiation notices, which require businesses to substantiate their claims and to produce supporting documentation.
"Before businesses claim their products have environmental or financial benefits they should carefully consider whether those claims are accurate and ensure that they are able to be substantiated," Mr Samuel said.
"Businesses that advertise 'special' or markdown prices by comparing their prices with a higher price or a RRP must also be able to prove that the comparisons are accurate and represent genuine savings to consumers that they would not get outside advertised 'sale' periods."
The court enforceable undertakings require QSS and SSS to publish corrective notices in newspapers in Queensland and Victoria, in an industry magazine and on their websites. Each trader is also required to contact past customers directly to inform them about the conduct and to set up a trade practices law compliance program.
Information about the ACCC powers to issue infringement, substantiation and public warning notices is available at www.accc.gov.au/notices.
The ACCC has a number of publications to assist businesses get their advertising right, including brochures on comparative advertising, the new Australian Consumer Law and general advice for small businesses on how to comply with the Act. These are available through the ACCC's website, www.accc.gov.au or in hard copy from the small business helpline, 1300 302 021.