Shop Talk | Consumer Law Enforcement Wrap-Up

Welcome to another bumper edition of Shop Talk: Consumer Law Enforcement Wrap-Up. There has been no shortage of ACCC activity in the consumer law space since our last wrap-up earlier this year, with recent developments reflecting key pillars of its Compliance and Enforcement Priorities for 2024-25. This has included a focus on misleading pricing and claims (particularly in energy), consumer and fair trading issues in the retail sector and digital economy, conduct impacting vulnerable or disadvantaged consumers, product safety issues for young children, compliance with consumer guarantees, and environment and sustainability claims.

Moving forward, we can expect to see the ACCC continue to focus on consumer, fair trading and pricing concerns in the supermarket and retail sectors as cost-of-living pressures continue to impact Australian consumers. This has been bolstered through additional federal funding, with the Federal Government announcing on 1 October 2024 that the ACCC will receive an additional $30 million over 3.5 years for investigations and enforcement relating to the supermarket and retail sector and that it will work with other bodies to reform planning and zoning regulations to remove restrictions which may act as a barrier to boosting competition in the supermarket sector.

ACCC Chair Gina Cass-Gottlieb has said:

Since our last wrap-up, the ACCC has secured substantial penalties and fines and commenced several court actions. In particular:

• EnergyAustralia has been ordered to pay penalties of $14 million for misleading consumers about electricity prices and failing to comply with the Electricity Retail Code;

• Secure Parking has been ordered to pay a $10.95 million penalty for misleading consumers into believing they could reserve a parking spot by using its "Secure-a-Spot" service;

• Captain Cook College has lost its High Court appeal in relation to the Full Federal Court’s finding that it had engaged in systemic unconscionable conduct for exploiting vulnerable students; 

• the Federal Court has ordered DG Institute to pay penalties of $5 million and consumer redress of $14.7 million for making false representations about ‘creditor-proof’ financial trust and mortgage default strategies;

• Grays eCommerce Group has been ordered to pay an agreed penalty of $10 million for making false or misleading claims in vehicle auction descriptions; 

• Qantas and the ACCC have jointly proposed an agreed penalty of $100 million and $20 million in consumer remediation for advertising and offering for sale tickets for flights it had already decided to cancel; 

• online florist Bloomex has been penalised $1 million for misleading review ratings and discount pricing;

• the ACCC has commenced proceedings against Coles and Woolworths , alleging that both supermarkets have misled consumers through discount pricing claims; 

• the ACCC has commenced proceedings against The Good Guys for alleged misleading representations in relation to its store credit policies; 

• the ACCC has commenced its first Federal Court case on greenwashing against Clorox for allegedly making misleading representations that its GLAD-branded plastic bags were made from 50% recycled “ocean plastic”;

• the ACCC has commenced proceedings against Mosaic Brands for allegedly making false or misleading representations in relation to advertised delivery timeframes as well as in relation to warranties and consumer guarantees; 

• the ACCC has bolstered its efforts to clamp down on product safety issues through issuing infringement notices to and/or accepting court enforceable undertakings from Oodie supplier Davie Clothing , MDI and TEEG in relation to button batteries in toys, and LG in relation to its solar storage batteries; and 

• the ACCC has also issued multiple infringement notices to HSBC for alleged inaccuracies in consumer data disclosures under the Consumer Data Right scheme, and to Dreamscape for allegedly falsely advertising ‘free’ subscription services with auto-renewal features. 

1    Court decisions and agreed settlements

EnergyAustralia gets a jolt: Federal Court penalises ‘big three’ energy retailer $14 million for misleading consumers about electricity prices and failing to comply with Electricity Retail Code

On 26 September 2024, the Federal Court ordered EnergyAustralia Pty Ltd (EnergyAustralia) to pay $14m in penalties for making false, misleading or deceptive statements to hundreds of thousands of consumers about electricity prices in contravention of the Australian Consumer Law (ACL), and for failing to provide mandatory information required by the Electricity Retail Code (the Code) [ ACCC v EnergyAustralia [2024] FCA 116].

EnergyAustralia admitted that between 20 June 2022 to 28 September 2022, it contravened the ACL and the Code:

• on almost 600,000 occasions by notifying customers of changes to EnergyAustralia’s electricity prices in writing, without clearly stating the lowest possible price and by misrepresenting the estimated annual price of electricity for an average customer; and 

• on more than 224,000 occasions by publishing 27 electricity offers on EnergyAustralia’s website without clearly stating the difference between the reference price and the unconditional price expressed as a percentage of the reference price, or the ‘lowest possible price’.

The Court ordered that EnergyAustralia pay pecuniary penalties of $4m and $10m for its respective contraventions, review its compliance program, and pay a contribution to the ACCC’s costs in the sum of $50,000.

This is the first enforcement proceeding brought by the ACCC under the Code, which commenced on 1 July 2019. The Code was introduced to increase transparency in the retail electricity market, requiring electricity retailers to include certain information when communicating pricing information to small customers. These requirements include stating ‘clearly and conspicuously’ the lowest possible price for a representative customer and the difference between the ‘reference price’ and ‘unconditional price’ as a percentage of the reference price. Since the Code was introduced in 2019, the ACCC has issued infringement notices to three electricity retailers for allegedly failing to include certain mandatory information when communicating prices, and it has also accepted two court-enforceable undertakings in response to breaches of the Code.

Insecure Parking: Major carpark provider penalised $10.95m for misleading consumers about its ‘Secure-a-Spot’ reservation service

In August 2024, the Federal Court ordered Secure Parking Pty Ltd (Secure Parking) to pay $10.95m in penalties for making false or misleading claims about their online pre-booking service called “Secure-a-Spot” [ ACCC v Secure Parking Pty Ltd [2024] FCA 884]. 

Secure Parking operates over 600 car park facilities across Australia and ran its Secure-a-Spot pre-booking service for 104 of these facilities. As the Court explained: ‘The idea behind Secure-a-Spot was that those seeking to park their cars in Secure’s parking stations would be able to reserve a parking space at a particular date, time and location’ . More than ten million Secure-a-Spot bookings were made between July 2017 and June 2022. 

However, no spots were ever actually reserved for booking customers. The service instead relied on ‘forecasted vacancy levels ’ and Secure Parking ‘took the gamble that those forecasts would be correct ’. Whenever the forecasts were wrong and the car parks filled up, customers who had used Secure-a-Spot were left with no spots available for them.

Secure Parking admitted that this system of conduct had misled consumers and reached an agreed position with the ACCC that was put to the Federal Court. In addition to paying the penalty, Secure Parking was required to pay part of the ACCC’s costs, publish corrective notices, and review its customer complaints systems. 

An uneven keel: Captain Cook College loses High Court appeal against finding of systemic unconscionable conduct

In August 2024, the High Court dismissed an appeal by Productivity Partners Pty Ltd (trading as Captain Cook College) of a Full Federal Court finding that the College had engaged in systemic unconscionable conduct when enrolling students in vocational education and training (VET) under government-supported student loan programs [ Productivity Partners Pty Ltd v ACCC [2024] HCA 27].

As we explained in our Consumer Law Cases 2023 Wrap-Up , the ACCC originally alleged that Captain Cook College had engaged in systemic unconscionable conduct involving: 

• targeting vulnerable and disadvantaged students who were unlikely to ever complete the courses as they lacked sufficient language, literacy, numeracy or technology skills;

• removing consumer safeguards from its programs and making it more difficult for students to withdraw from courses;

• making false or misleading representations about the quality of the courses and the job prospects for graduates; and

• failing to provide students with adequate information about the costs and risks of enrolling in the courses.

According to the ACCC, “Over 90 per cent of those consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course. ” The ACCC was successful both at first instance and on appeal to the Full Federal Court. Though the seven High Court justices delivered six separate judgments, all justices agreed that by removing safeguards against the enrolment of unsuitable students to receive more Commonwealth VET fees, the College had engaged in a system of conduct that was unconscionable. 

The High Court also dismissed appeals from the College’s acting CEO at the time of the contraventions, Mr Blake Wills, and from the College’s parent company, Site Group International Limited (Site), against Full Court findings that they were both “knowingly concerned” in the College’s unconscionable conduct.

Chief Justice Gageler and Justice Jagot ruled that it was not necessary for Mr Wills, as the acting CEO of the College, to know that the conduct in question was unconscionable for him to be found to have been “knowingly concerned”, and that his knowledge of essential matters which together made up the conduct was sufficient. Since Mr Wills was also COO of Site at the time, this “knowing concern” was also attributed to Site by operation of section 139B of the Competition and Consumer Act 2010 . 

Lacking in credit: Federal Court orders DG Institute to pay $20 million in penalties and consumer redress for false representations about ‘creditor-proof’ financial trust

In July 2024, the Federal Court ordered Master Wealth Control Pty Ltd (trading as DG Institute) to provide $14.7m in consumer redress, and pay a penalty of $5m, for making two misleading representations during the delivery of its financial literacy programs [ ACCC v Master Wealth Control Pty Ltd (Penalty) [2024] FCA 795]. This follows an earlier judgment on the issue of liability in April 2024 [ ACCC v Master Wealth Control Pty Ltd [2024] FCA 344].

The first misleading claim was that homeowners who default on their mortgage repayments would lose all equity in their homes (when in fact the mortgagor receives the remainder of any forced sale proceeds after the mortgagee has received the amounts owed to it plus its reasonable costs of recovery). On this false basis, the DG Institute encouraged its students to undertake a strategy of offering to buy homes from distressed mortgagors for under market value, as this would also let the mortgagors keep some of their equity in their homes, resulting in “a win/win” for the buyer and mortgagor. 

The second misleading claim related to what DG Institute called the “Vestey Trust” structure, a purported structure that DG Institute represented would enable users to immediately and completely protect their assets from creditors. However, as DG Institute’s senior counsel admitted during the proceedings, the trust did not achieve this protection on the terms promised.

The Federal Court also found that Ms Dominique Grubisa, the sole director of the DG Institute who ran most of the seminars, had “aided, abetted or procured the contraventions or was knowingly concerned in or party to ” the contraventions. Ms Grubisa was ordered to personally pay a $1m penalty and was disqualified from managing a corporation for 5 years.

In August 2024, DG Institute and Ms Grubisa sought and received a stay of the penalty and consumer redress orders, pending the outcome of an appeal to the Full Federal Court.

The Gray area of auctions: Auction site Grays agrees to $10m penalty and consumer redress scheme for misleading descriptions of cars sold by auction

On 18 July 2024, the Federal Court ordered by consent Grays eCommerce Group Limited (Grays) to pay $10 million in penalties and implement a consumer remediation scheme, for making false or misleading representations in auction listing descriptions [ ACCC v Grays eCommerce Group Limited [2024] FCA 771]. 

Grays is an online auction platform operating in Australia that sells cars (amongst other things) by way of auction, typically on consignment for a third-party vendor. Each listing was prepared by Grays and contained a combination of information retrieved from third-party sources, information from the vendor, and information from a walkaround inspection and start-up of the vehicle conducted by Grays staff. 

Grays admitted that between 1 July 2020 and 30 June 2020, it made false or misleading representations in at least 750 vehicle listings, including in relation to the make, model, features or undisclosed faults with the cars.

In accepting the penalty amount jointly proposed by the ACCC and Grays, the Court had regard both to “the seriousness of Grays’ contraventions ” and to “the cooperation that Grays has displayed ” with the ACCC. The Court also noted that Grays would pay out a total of ~$3.8 million in remediation payments to consumers, and that this remediation process was originally commenced voluntarily by Grays. 

Ghostbusters: ACCC and Qantas agree to $100m penalty and $20m remediation for “ghost flights” misdescriptions

In May 2024, the ACCC and Qantas entered into an agreement (subject to court approval) to settle the ongoing “ghost flights” litigation brought by the ACCC against Qantas in 2023 (VID685/2023). 

Qantas admitted to having misled consumers and agreed to pay $20m to over 86,000 consumers who “were sold tickets on flights that Qantas had already decided to cancel ”. Qantas has also undertaken to the ACCC to notify customers of cancelled flights, and to stop selling tickets onto cancelled flights, as soon as practicable. 

The parties have also agreed to jointly submit that the Federal Court impose a $100m penalty in relation to this conduct, which if agreed by the Court, will be the largest agreed penalty secured by the ACCC. The matter is listed for a final hearing on 8 October 2024 , where the Federal Court will assess the appropriateness of the proposed penalty figure and other proposed orders. For more information about this case and its implications for businesses regarding ACL compliance see our previous knowledge article here .

Rose-tinted: $1m penalty to Bloomex florist for misleading star ratings and strikethrough pricing

In March 2024, the Federal Court ordered that Bloomex Pty Ltd (Bloomex) pay $1m in penalties for three separate false or misleading representations to customers on its online florist website [ ACCC v Bloomex Pty Ltd [2024] FCA 243]:

• Bloomex had published aggregate review ratings (e.g., 4.3/5 stars) on its products between February 2019 and March 2023. However, some of these ratings had not been updated since January 2015, and included ratings given by customers using the Canadian and US Bloomex sites. Bloomex admitted this could mislead consumers, as these ratings were “not a reliable indicator of the degree of customer satisfaction ” of Australian customers. 

• Bloomex used ‘50% off’ strikethrough pricing representations on approximately 70 products between February 2019 and March 2023. However, Bloomex had never offered the products at the full prices identified in the strikethrough representations. Although the founder and director of Bloomex gave evidence that the original intention of the strikethrough representations was to show the savings relative to “usual market prices available elsewhere ”, Bloomex ultimately admitted that these representations were misleading. 

• Bloomex had failed to disclose in its “Express Checkout - Billing” webpage that it would add an additional surcharge of $1.95 to $4.95 to the sale: this would only appear after the customer entered their delivery details. Thus, Bloomex failed to identify the single full price of its products at the checkout stage. 

This is another ACCC enforcement action taken against an online florist, with the ACCC commencing Court action against Meg’s Flowers last year (see our 2023 Consumer Law Cases Wrap Up for more details).

Earlier this month, the Guardian reported that the ACCC and Meg’s Flowers had reached a proposed agreed penalty of $1m, and that Justice Collier of the Federal Court had reserved her decision on whether this penalty was appropriate. The ACCC has not yet formally published any information about this proposed settlement.

2    New Proceedings Commenced

Super-marketing under scrutiny: Coles and Woolworths alleged to have misled consumers through discount pricing claims

On 23 September 2024, the ACCC commenced proceedings against Coles Supermarkets Australia Pty Ltd (Coles) and Woolworths Group Limited Woolworths ) for allegedly misleading consumers through discount pricing claims on common supermarket products in contravention of sections 18 and 29(1)(i) of the ACL. In separate proceedings, the ACCC alleges that Coles and Woolworths represented to consumers that the prices of affected products promoted on Coles’ ‘Down Down’ and Woolworths’ ‘Prices Dropped’ programs were discounted when, in fact, the purported discount was illusory.

The ACCC’s allegations relate to products sold by Coles and Woolworths at regular long-term prices which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year. According to the ACCC, the prices of the products were subsequently increased by at least 15% for brief periods, before the products were then placed on Coles’ ‘Down Down’ and Woolworths’ ‘Prices Dropped’ promotions, at prices lower than the increased prices but higher than, or the same as, the regular price that applied before the price increases.

The ACCC alleges the display of the Prices Dropped and Down Down tickets were misleading, as the prices of the products were in fact higher than or the same as the regular price at which the supermarket had previously offered the products for sale.  

The ACCC is seeking declarations, penalties, costs, and other orders, including community service orders that Coles and Woolworths must each fund a registered charity to deliver meals to Australians in need, in addition to their pre-existing charitable meal delivery programs.

Too Good to be true? The Good Guys accused of running misleading store credit promotions

In July 2024, the ACCC commenced proceedings against The Good Guys Discount Warehouses (Australia) Pty Ltd (The Good Guys) for making false representations about their store credit policy [VID633/2024]. The ACCC has three central claims alleging that: 

• The Good Guys represented to customers that they only needed to make a qualifying purchase to receive store credit, but in fact, customers also had to opt in to receiving marketing communications to receive the credit. 

• The Good Guys gave consumers the impression that the store credit would not expire or would only expire within a reasonable time period. However, for the majority of promotions, the store credit would expire within a very short timeframe of 10 days or less. 

• Some consumers who both made qualifying purchases and opted into marking communications did not actually receive the store credit to which they were entitled. 

Interestingly, as store credit may technically fall within the remit of ‘financial services’, ASIC has delegated its powers to sue under the ASIC Act to the ACCC in relation to the store credit expiry allegation. 

The ACCC is seeking consumer redress, penalties, declarations, compliance orders, publication orders, and costs.

Nothing to be GLAD about: Alleged greenwashing about recycled ‘ocean plastic’ in GLAD plastic bags

In April 2024, the ACCC commenced proceedings in the Federal Court against Clorox Australia Pty Ltd (Clorox), the manufacturer of GLAD-branded kitchen and garbage bags, for false or misleading representations that some of their products were made of recycled ‘ocean plastic’ [VID315/2024]. 

The ACCC alleges that Clorox claimed that its GLAD Kitchen Tidy Bags and Garbage Bags were 50% recycled ocean plastic, when this wasn’t the case. According to the ACCC, the bags were “instead partly made from plastic that was collected from communities in Indonesia up to 50 kilometres from a shoreline, and not from the ocean or sea. ”  

As photos on the ACCC’s media release show, the front of the packaging for the products states “50% Ocean Plastic”. But on the back of the packaging, it says ‘* Made using 50% ocean bound plastic that is collected from communities with no formal waste management system within 50 km of the shore line ’.

The allegations relate to the period of June 2021 to 13 November 2022, and the products were reportedly withdrawn from supply to retailers from July 2023. The ACCC is seeking declarations, penalties, injunctions, an order to implement a compliance program, corrective notices, costs and other orders.

For more analysis, including how this case compares to the ACCC’s enforcement action against MOO Premium Foods Pty Ltd for similar “Ocean plastic” packaging claims, see our article from earlier this year .

Unfashionably late: Major clothing retailer Mosaic Brands allegedly failed to meet advertised delivery timeframes

In March 2024, the ACCC commenced proceedings in the Federal Court against Mosaic Brands Limited (Mosaic) for allegedly making false or misleading representations in relation to its advertised delivery timeframes [NSD232/2024]. Mosaic owns various fashion brands including Noni B, Rivers, Katies, Rockmans, Millers, Autograph, Beme, Crossroads and W. Lane. 

On its brand websites, Mosaic advertised that products would be delivered within certain timeframes, varying between different brands but typically between 2 to 17 business days after purchase. However, the ACCC alleges that over 26% of goods sold by Mosaic Brands between 23 September 2021 and 31 March 2022 were dispatched at least 20 days after the purchase date. 

The ACCC also alleges that by not meeting their promised delivery timeframes, Mosaic Brands breached section 36(4) of the ACL, which prohibits businesses from accepting payment from a customer when their products are not delivered within the timeframe specified by the customer before payment (or when no period is specified, within a reasonable time). Section 36(5) of the ACL provides an exception to this rule, when the failure to deliver on time is due to factors outside the control of the business and the business “took reasonable precautions and exercised due diligence to avoid the failure .”

Finally, the ACCC alleges that Mosaic made false or misleading representations to consumers in relation to warranties and consumer guarantees under s 18(1) and 29(1)(m), by publishing a term on its website that it would only refund consumers for faulty products within 6 months of the purchase date. 

The ACCC reports that it is seeking declarations, injunctions and penalties, as well as costs and other orders, including that Mosaic Brands implement a consumer law compliance program. You can find more information about this case and how it relates to the ACCC’s campaign for reforms of the consumer guarantees regime in our knowledge piece from March this year, and in our Competitive Edge podcast episode on consumer guarantees .

3    Infringement notices and undertakings 

No label, No G‘Oodie’: Oodie supplier pays $101,280 for failing to comply with mandatory safety standard

On 5 July 2024, the ACCC issued Davie Clothing Pty Ltd (Davie Clothing), supplier of the loungewear brand Oodie, with six infringement notices for allegedly failing to comply with a mandatory product safety standard.

The ACCC alleged that between 29 September 2022 and 14 July 2023, Davie Clothing supplied 2,460 units of the Kids Beach Oodie to consumers in Australia which failed to include high fire danger warning labels affixed to the Product and displayed on its website. Davie Clothing admitted that these Oodies contravened section 106(1) and (2) of the ACL by failing to comply with a mandatory safety standard, the Consumer Goods (Children’s Nightwear and Limited Daywear and Paper Patterns for Children’s Nightwear) Safety Standard 2017 (Cth), which mandates requirements for children’s nightwear.

Davie Clothing provided the ACCC with an enforceable undertaking and paid $101,280 in penalties. For affected customers, Davie Clothing issued a voluntary recall for the affected product, with more information available on its website here .

These investigations were part of the ACCC’s enduring priority to investigate product safety issues which have the potential to cause serious harm to consumers and conduct which impacts vulnerable customers.

Safety testing ain’t child’s play: Novelty toy manufacturer and distributor both pay infringement notices for insufficient button battery testing 

In June 2024, the ACCC issued infringement notices to novelty toy manufacturer MDI International Pty Ltd (MDI), and to TEEG Australia Pty Ltd (TEEG), the owner of Timezone, Kingpin and Zone Bowling, for allegedly failing to comply with button battery testing requirements. Both companies received three infringement notices and paid penalties of $49,500 each.

MDI supplies TEEG with novelty toys, which TEEG customers can redeem as prizes using points collected by playing games at TEEG venues. The three impugned novelty toys were the World’s Smallest Alarm Clock, the Pocket Fart Gun, and the Sonic Spinner, all of which contain button batteries. The ACCC alleged that these toys had not been adequately tested before being supplied to consumers. 

Between July 2022 and June 2023, MDI supplied TEEG with approximately 10,000 units of these three toys, without completing the required safety testing. TEEG then on-supplied around 5,000 units to customers. 

Button batteries present a significant danger to young children, and so toys must be tested to ensure that the battery cannot accidentally release. The ACCC indicates that the “products have all since been tested, and these tests indicated that they comply with the requirements of the safety standard .” 

LG undertakes to up the charge on its voluntary recall efforts for fire-prone batteries

In May 2024, LG Energy Solution Ltd (LG) provided an enforceable undertaking to the ACCC in relation to its product recall of LG solar storage batteries. Since 2020, LG has issued voluntary recalls for over 18,000 batteries which can overheat and catch fire without warning. However, the ACCC reported in May 2024 that around 4,400 batteries were yet to be located. 

According to the ACCC, LG agreed to run a “widespread advertising campaign to alert consumers about safety risks with the batteries subject to the recalls, and to use its best endeavours to ensure that all affected batteries are remedied within 12 months. ”

LG had issued a software update to the batteries that was designed to prevent the batteries from catching fire. However, the ACCC reported a recent incident of fire involving a battery that had already received the software update. 

Due to this, as part of the undertaking given by LG, it “agreed to replace these affected batteries or provide refunds to consumers if investigations conclude that a software update is no longer an appropriate remedy .” LG also agreed to compensate consumers for higher energy bills incurred while the batteries are switched off due to the fire risk.

The undertaking comes after the Assistant Treasurer issued a proposed recall notice, which is a formal step towards a compulsory recall. However, after the court-enforceable undertaking was given to the ACCC, the Assistant Treasurer has accepted the ACCC’s recommendation that a compulsory recall was not necessary. 

Two data wrongs don’t make a data right: HSBC pays two infringement notices for failing to meet Consumer Data Right requirements

In April 2024, HSBC Bank Australia Limited (HSBC) paid penalties of $33,000 after the ACCC issued it with two infringement notices for alleged breaches of the Consumer Data Right (CDR) rules. 

The CDR is an economy-wide Federal Government program, currently in force in the banking and energy sectors, designed to help consumers compare products more easily. The CDR allows consumers to share data about them held by third party data holders (such as their bank) with accredited providers. This is designed to help consumers better compare, and switch between, rival products and services. In this instance, HSBC failed to meet its CDR obligations in two respects: 

Firstly, HSBC allegedly failed to accurately and completely disclose its fixed rate home loan interest rates when requested via the CDR. Secondly, HSBC allegedly failed to accurately disclose credit card account balance data when this was requested by consumers. 

In its media release about the infringement notices, the ACCC stressed the need for CDR data to be accurate: “For the CDR to be effective, it is critical that CDR data is of high quality. This means that product data and consumer data - which a consumer has consented to share - must be accurate, up-to-date, complete, and in the required format .”

Since paying the infringement notices, HSBC has reportedly “taken steps to improve its CDR compliance, including by rectifying data quality issues identified by the ACCC in its investigation .”

Tell him he’s dreamin’: Dreamscape pays infringement notices for making false and misleading representations about domain products

In January 2024, the ACCC issued three infringement notices totaling $56,340 to Dreamscape Networks International Pte Ltd (Dreamscape) for alleged false or misleading representations about ‘free’ products automatically added at checkout. 

Dreamscape operates the Crazydomains.com.au website, which sells services relating to domain name registration and web hosting. When customers went to checkout on the Crazydomains.com.au website, two products were added to their carts and labelled as being free - a ‘3-month website builder’ and an ‘additional domain name registration’.

However, the products were actually subscriptions with an auto-renewal feature, and only the initial period was free, meaning that customers would begin to be charged after the initial free period concluded. According to the ACCC, Dreamscape “did not make it clear to consumers at the point of sale that the ‘free gifts’ were subject to auto-renewal and fees .”

In addition, Dreamscape advertised a ‘Domain Privacy’ product to customers purchasing a .au domain, claiming it would ‘lock down from hijacking and hides your personal information’. According to the ACCC, however, these customers were sold a different product “that did not hide contact names or email addresses from the public domain ”.

Since the ACCC’s enforcement action, Dreamscape has updated its disclosures around auto-renewals and the uses of its privacy products.