Small businesses contacted the Australian Competition & Consumer Commission (ACCC) nearly 5000 times in the second half of 2017, up from 3700 in the preceding six months, according to a new report.
The ACCC’s latest Small business in focus report, covering July to December 2017, shows small businesses made 2365 enquiries to the Commission along with 2590 reports during the six-month period, with the main issues reported being alleged misleading conduct/false representations by other businesses (1057) and consumer guarantees (464).
Acting Chair Dr Michael Schaper told Dynamic Business that an increase in the number of small businesses contacting the ACCC is consistent with a ‘broader trend of more people contacting the Commission overall. He indicated that Christmas trade would have contributed to an uptick in enquiries amongst small businesses, such as questions around consumer guarantees, but also cited increasing awareness of key issues relating to their rights and responsibilities under consumer law, including the ban on excessive credit card surcharging as well as new protections against unfair contract terms. He added, “Certainly, the publicity around court action we’ve taken against the likes of Servcorp and JJ Richards & Sons may have contributed to small businesses reporting allegations of unfair contracts to the ACCC.”
Schaper noted that nearly two thirds of the call received from small businesses were made by micro-sized businesses with up to 4 staff, which he described as being ‘more vulnerable’ than businesses. He said a ‘surprisingly big’ number of small businesses who contacted the ACCC had been operating for at least ten years, which accounted for 1 in 3 calls.
“My take on that is that as people spend more time in business and as they become more aware of their rights as well as their overall trading environment, they become more comfortable in exercising their rights and raising issues,” he said. When businesses are just starting up, they’re generally far too concerned with just the nuts and bolts of getting a business of the ground, finding people marketing it, getting customers and so forth – once they get a bit more established, they tend to become more comfortable raising things with regulators like ourselves.”
Given the significant number of small businesses reporting misleading conduct or false representations by another business (“where one starts and the other begins can come rather technical”), Schaper had the following advice for small and micro businesses to avoid drawn-out business disputes: “When you’re doing business with another business, it’s good practice to get it in writing, where at all possible, so you’ve got a paper trail. This will mean that if you come to us with a complaint, there’s something we can look at and follow and it doesn’t become a “he said, she said” scenario, which are hard to untangle.”
Asked about how many of the issues reported to the ACCC during 2017, Schaper said this information was not included in the report.
“The reason is that some issues have a long trail and the businesses that make the initial report don’t always reach out to us to advise us of the outcome,” he said. “To be honest, we don’t have the people to be able to follow-up every matter. We do, however, refer to the state and federal small business a significant number of issues that either don’t fall within the Competition and Consumer Act 2010 or would be better suited to mediation rather than law enforcement. We report, on average, 2000 matters a year to the various small business ministers, so around a quarter of all calls received last year.
Schaper encouraged small businesses to learn more about their right and responsibilities, noting that the ACCC’s recently updated Small Business & the Competition and Consumer Act publication is a comprehensive guide to the law for small businesses: It provides essential information on pricing, unfair contract terms, treating customers fairly, selling safe products and resolving disputes”.
Related: One in two small businesses relying on new protections against unfair contract terms, ACCC has improved ‘tens of thousands’ of contracts for SMES since November 2016, Federal Court finds waste management giant’s contracts with small businesses were unfair and Excessive payment surcharge ban now in effect; consumer advocate encourages no surcharges.