The Federal Court has today issued orders by consent declaring that Refund Home Loans Pty Ltd and its founder and managing director, Wayne Rodney Ormond, have contravened the Trade Practices Act 1974.
Refund Home Loans and Mr Ormond made misleading statements to franchisees that they had been given approval by the Australian Competition and Consumer Commission in relation to Refund Home Loans' treatment of franchisees.
The ACCC instituted proceedings in October 2009 after receiving a number of complaints in relation to representations made by Mr Ormond.
Refund Home Loans and Mr Ormond admitted that statements such as:
- "Now I've spoken to the ACCC. I've done everything in accordance with the law" and
- "Mate, I've had meetings with Graeme Samuel himself. I have nothing to worry about."
were false and misleading and deceptive and in contravention of sections 52, 53(c) and 53(d) of the Act.
In addition to declarations, by consent the court ordered:
- injunctions restraining Refund Home Loans and Mr Ormond from making such representations in the future
- corrective statements to all current and some former franchisees, and
- the implementation of a trade practice law compliance program, including training for Mr Ormond.
The role of the ACCC is to promote compliance with the federal competition, fair trading and consumer protection laws. The ACCC does not, in any circumstances, approve individual business conduct.
"Using the name of the ACCC or individual ACCC officers as a means of discouraging franchisees from exploring their own legal rights is reprehensible," ACCC chairman Graeme Samuel said.
"Franchisors and franchisees have a special business relationship. Franchisees trust their franchisor to provide honest and reliable information as to their own business and about franchising generally and to mislead them in this manner is an abuse of trust."
Further information on misleading and deceptive conduct, franchising and the responsibilities of franchisors and franchisees can be found on the ACCC's website www.accc.gov.au.
This information can be found in the For Business section of the website via the Industry codes of conduct and Franchising code links. A list of ACCC small business publications is also available in the For Business section.