SMEs need fairer contracts and stronger codes

| August 29, 2018

Unfair contract terms, misleading conduct and scams are some of the biggest issues affecting small businesses in Australia, according to the ACCC’s latest Small Business in Focus report.

The most commonly reported issue reported by businesses remains misleading or deceptive conduct, closely followed by enquiries about consumer guarantees.

Unfair contracts remain a major issue, and in the past six months the ACCC has taken action against businesses including ATM provider Cardtronics, potato wholesaler, Mitolo, Wisdom Properties Group and AWB Harvest Finance Pools over potentially unfair contract terms.

“We have many more investigations under way and further actions on unfair business-to-business contracts will take place soon,” ACCC Deputy Chair Mick Keogh said.

Scams also continue to hurt bottom lines with thousands of small businesses reporting losses of more than $2.3 million dollars to the ACCC’s Scamwatch in 2018 so far.

“Small businesses continue to lose money to sophisticated scams. Businesses need to be very careful about business email scams. These are where scammers pretend to be a supplier of a small business, or even someone within the business like the CEO or CFO, and intercept payments by emailing new payment details,” Mr Keogh said.

Industry codes provide a range of important protections for small businesses and the ACCC is responsible for enforcing these codes, including the Horticulture Code, Food and Grocery Code, Franchising Code and Oil Code.

“At the beginning of the year, we named our priority focus areas to ensure small businesses have a level playing field to compete. We are honing in on unfair terms in business-to-business contracts and making sure industry codes are working in the way they are intended to offer small businesses protection where it is needed,” Mr Keogh said.

“There has deservedly been a spotlight on issues impacting the franchising industry. We have been involved in the Parliamentary Joint Committee inquiry into both the Franchising Code and Oil Code. We submitted 10 recommendations such as increased penalty provisions and more meaningful disclosure relating to franchisees’ costs which we think will improve the outcome for franchisees.”

“We are committed to ensuring that Australia’s 2.2 million small businesses have a fair go. We have a range of regulatory powers available to us, and will continue to leverage these get the best outcomes for small business, franchises and agriculture companies,” Mr Keogh said.

 

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