Craftmatic has paid infringement notice penalties totalling $19,800 for alleged misrepresentations made during an in-home sales presentation for Craftmatic adjustable beds on 26 September 2012.
The Australian Competition and Consumer Commission took action after it was alleged that a Craftmatic salesperson had said during an in-home sales presentation that it was the first day on which the price of the Craftmatic bed being offered had been reduced, when that was not true.
It was also alleged that the salesperson had misrepresented the value of Craftmatic’s ‘lifetime warranty’ and the price a consumer could purchase a bed for on a payment plan.
“The ACCC is committed to protecting consumers in their own homes and this action is a warning to businesses that use misleading or deceptive tactics during sales spiels conducted in homes,” ACCC Commissioner Sarah Court said.
“Tactics like this can induce people to jump into contracts or buy things that aren’t as good as they seem. Businesses that engage in-home or door-to-door sales must have effective systems in place to ensure that their salespeople comply with their strict obligations under the Australian Consumer Law.”
Craftmatic adjustable beds were primarily sold to elderly consumers through in-home sales presentations. Following contact by the ACCC, Craftmatic informed the ACCC that it had decided to cease all in-home sale presentations from 14 December 2012.
This action follows earlier proceedings by the ACCC against Craftmatic Australia Pty Ltd in 2009, in which the company admitted that it had engaged in unconscionable conduct by making various misleading representations and using a sales method designed to unduly influence elderly consumers in their homes.
The payment of infringement notice penalties is not an admission of a contravention of the Competition and Consumer Act 2010. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.
Background
The ACCC has recently taken action against a number of businesses that conduct in-home or door-to-door sales activities.
In March 2013, the ACCC filed proceedings in the Federal Court of Australia against EnergyAustralia Pty Ltd (formerly TRUenergy Pty Ltd) and four marketing and sales companies engaged by Energy Australia in relation to their door-to-door selling practices.
In September 2012, the Federal Court ordered Neighbourhood Energy Pty Ltd and its former marketing company Australian Green Credits Pty Ltd to pay total penalties of $1 million by consent for illegal door-to-door selling practices following action by the ACCC.
In March 2012, the ACCC took action against AGL Sales Pty Ltd and AGL South Australia Pty Ltd, and marketing company CPM Australia Pty Ltd, alleging that the companies engaged in misleading and deceptive conduct. These proceedings are continuing.