By Claire Reilly
The Australian Competition and Consumer Commission (ACCC) is ramping up its focus on small businesses and franchises following more than 3,000 complaints about the sector in the first six months of 2013.
Advertising services, telecommunication operators and “non-store” retailers such as online retailers were at the top of the list for most complaints according to the ACCC, which is set to release a report on the state of small business tomorrow.
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In compiling its Small Business in Focus report, the ACCC found that the biggest pain point in the industry was misleading advertising, accounting for over 1,000 of the complaints — more than a third of the total. These include “credence claims” made by businesses about the country of origin or the quality of a product being sold, which the ACCC said were designed to “improve the appeal of a product” when consumers were comparing it with a similar product.
“The ACCC is keen to ensure that small businesses are aware of their rights and responsibilities, and has stepped up its engagement with small business,” said ACCC deputy chair, Michael Schaper. “Our Small Business in Focus report sets out the key issues the sector is raising with us.
“Credence claims are important, and we need to protect honest small businesses who are selling premium products from unscrupulous competitors making false representations. The ACCC has been very active in policing credence claims in a wide variety of different markets – from meat claiming to be sourced from King Island to Australian made tags on Ugg boots that are actually made in China.”
When it is released tomorrow, the Small Business in Focus report will also list the sectors of the small business and franchising industry generating the most complaints and enquiries.
According to the ACCC, these include: “Advertising services; ‘Non-store’ retailing (such as online retailers, milk vendors); ‘Other’ store-based retailing (e.g. art galleries, musical instrument stores, pet shops); Travel agency and tour arrangement services; [and] Wired telecommunication network operation”.
Despite the issues still facing the small business sector, the ACCC reported positive results from a free online education program that it launched for small businesses in April of this year, which has had more than 5,000 participants since launch. The watchdog has also had similar success with its free online program for those wanting more information about becoming a franchisee. More information on these programs is available on the ACCC Competition and Consumer Law website.