The Australian Competition and Consumer Commission yesterday obtained orders and injunctions in the Federal Court, Melbourne, against homebuilder Orbit Homes Australia Pty Ltd.
The ACCC brought the action against Orbit Homes as the result of home packages advertised in March, April and May 2001 in the Herald Sun newspaper.
The ACCC alleged the advertisements, which offered home features at no extra cost, had misled consumers because the cost of the features had been factored into the advertised cost. The total cost of the extras referred to in the advertisements was between $14,700 and $18,600.
"Home purchase and construction is an extremely important decision for consumers and can also be very complex and confusing", Acting ACCC Chairman, Mr Rod Shogren, said today.
"In order for consumers to make informed decisions, advertisements promoting home construction must be clear and accurate".
In settlement, Orbit Homes has consented to court orders:
- restraining Orbit Homes from engaging in similar conduct in the future;
- requiring Orbit Homes to implement an appropriate corporate compliance program focussing on the consumer protection requirements of the Trade Practices Act 1974;
- requiring Orbit Homes to publish a public disclosure notice in the Herald Sun newspaper and to place a public disclosure notice on its web site, advising as to the circumstances giving rise to the action
by the ACCC; and
- to meet the ACCC's legal costs.
Mr Shogren noted that Orbit Homes co-operated with ACCC inquiries, and had moved quickly to resolve the matter. Orbit Homes conceded the advertisements were likely to mislead consumers."In circumstances where the ACCC believes advertising has misled the public, it will not hesitate in taking action to rectify the situation", Mr Shogren said.
The court has adjourned to a date to be fixed to consider the ACCC's
argument for declarations.