Misleading claims the biggest concern for small business: ACCC

The biggest causes for complaint from small businesses to the ACCC are accusations of misleading conduct and false representations, according to data from the consumer watchdog. These complaints are usually directed at competing small businesses, big businesses and sometimes suppliers.

Small businesses made 5,396 complaints and 1,499 enquiries to the ACCC between 1 January and 30 June 2014. This is compared to 3,580 complaints in the six months prior from July to December 2013.

The numbers were published in the ACCC’s latest Small Business in focus report which includes the latest small business and franchising related complaints data and highlights the ACCC’s work in the small business sector.

The number of complaints from the franchising system (primarily from franchisees but also a small number of franchisors) is more stable, dropping from 309 complaints in July-December 2013 to 282 complaints in the six months ending June 30 2014.

ACCC Deputy Chair Dr Michael Schaper attributes some of the increase in complaints from small business to better data collection systems within the ACCC that record who is making the complaint or enquiry.

He also pointed out that the ACCC has also been working to improve its outreach to small business groups, making more work for themselves by encouraging small businesses to get in touch with complaints and concerns.

Advertising claims, ‘no refunds’ policies and pricing are key concerns of small businesses when it comes to misleading conduct/false representations, which made up the bulk of the complaints, numbering 1,560 in 2014, up from 1,039 in the July-December 2013 period.

Complaints about consumer guarantees also experienced a big jump from 373 to 959 and product safety complaints climbed from 68 to 210.

Some complaints are made about distributors refusing to supply businesses products they want to sell, something the supplier has the right to do.

When it comes to standing up to big businesses the ACCC had two notable victories in the past six months. The claim made by Coles over its “Freshly Baked In-Store” bread was found to be false by the Federal Court and the ACCC also accepted a court enforceable undertaking from Carlton & United Breweries in relation to concerns that it represented that Byron Bay Pale Lager was brewed by a small brewer in Byron Bay when this was not the case.

“Small businesses often rely on a unique selling point to compete. If a large business presents a product as having a feature that it doesn’t, this can harm small businesses,” Dr Schaper said.

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