Misleading conduct at top of SMEs’ list of concerns: ACCC

Misleading conduct by other businesses continues to be at the top of the list of concerns among the SMEs that are contacting the competition watchdog, with the number of enquiries and complaints to the Australian Competition and Consumer Commission from small and medium businesses continuing an upward trend.

In its latest six-monthly small business report, released this morning, the ACCC said it was contacted more than 7,700 times by small businesses in the first half of this year. This compares to 7,355 enquiries and complaints in the six months between July and December 2015.

The ACCC received more than 5,500 complaints from small businesses in the first half of this year, compared to around 4,900 in the six months prior.

However, the number of complaints to the ACCC about franchising have declined over the same period, from 411 complaints between July and December 2015, to 236 complaints in the first half of this year.

Misleading conduct is by far the most complained about issue for small businesses contacting the ACCC, including in the franchising sector and the agriculture industry, which the ACCC has collected complaints data about for the first time.

Small businesses also continue to be hit by scams, with the ACCC reporting $1.6 million has been lost by small businesses that have contacted the ACCC.

Dr Michael Schaper, deputy chairman of the ACCC, told SmartCompany complaints by small businesses about misleading conduct commonly relate to comparisons in advertising.

While Schaper says it is not illegal for one business to compare their offerings to others in advertising, complaints can arise when businesses are not comparing “apples for apples”.

“Sometimes it might not be a direct comparison or a claim they can’t substantiate,” he says.

The ACCC does not break down the number of complaints levelled against big businesses versus smaller operators but Schaper says in his experience, the ACCC receives complaints about the conduct of businesses of all sizes.

“It’s not just one way about big business,” he says.

“Sometimes your fiercest competitor is down the street.”

Looking ahead to the next six months, Schaper expects forthcoming changes to credit card surcharges and the introduction of protections for small businesses against unfair contracts in November will prompt small businesses to contact the ACCC.

The changes to contract provisions are the more complex of the two issues, says Schaper, and the ACCC has been consulting with businesses in five key sectors it believes will be affected by the reform: franchising, telecommunications, commercial leasing, independent contracting and agriculture.

“Some businesses won’t be thinking about this until closer to the date but we’re saying to businesses who are signing contracts, ‘do you need to do so now or can you hold off until you have these protections?'” Schaper says.