Penalties for misleading small businesses

The Federal Court has ordered Safety Compliance Pty Ltd (Safety Compliance) pay penalties totalling $515,000 for making false or misleading representations to small businesses in connection with the supply of safety wall charts and first aid kits.

In her judgment, Justice Farrell stated that Safety Compliance’s business model was “a systematic and deliberate scam targeted at potentially large numbers of people in small businesses across Australia”.

The company allegedly sold wall charts and first aid kits to small businesses through telemarketing calls, as well as promoted its products on its website.

The conduct of Safety Compliance was first raised with the ACCC by NSW WorkCover in December 2010.

On 13 March 2015, the court declared that from about June 2010 until June 2012 Safety Compliance had made false or misleading representations that workplace safety laws required businesses to maintain workplace wall charts and first aid kits of the same nature as those sold by Safety Compliance, when in fact the laws did not.

The court also ordered that three individuals associated with Safety Compliance pay penalties for their involvement, which included reportedly providing direction to sales staff to make false representations to small businesses.

“The ACCC’s enforcement action in this case shows that it takes scam conduct affecting small businesses seriously,” ACCC Deputy Chair Dr Michael Schaper said.

“The court’s decision to impose penalties and banning orders against the individuals for their involvement in this scam sends a strong deterrent message that conduct of this nature is unacceptable, and that individuals will be liable for their involvement in such scams.”