The Australian Competition and Consumer Commission (‘ACCC’) has ordered Booktopia Pty Ltd (‘Booktopia’) to pay $6 million dollars in penalties for breaches of the Australian Consumer Law (‘ACL’).

Specifically, Booktopia was found to have made false and misleading representations regarding consumer rights and guarantees in the Terms of Business provided on their website, and by their customer relations and service staff working within their service centres.

The ACL is primarily responsible for protecting the rights of the consumer. The ACL protects consumers when goods and services do not meet the guarantees represented by the company.  A company’s specific and individualised terms and conditions cannot restrict or modify these consumer rights.

The ACCC continuously monitors businesses to ensure that they comply with the ACL and are not infringing on the rights of the consumers.  

The ACCC found the following representations made by Booktopia to be false and misleading:

1. Consumers are required to notify Booktopia of any damaged or incorrect products within two days from the time of delivery in order to be eligible for a refund;  
2. Consumers have no right to a refund on non-refundable products including eBooks, digital content, or products ordered in bulk which were charged at a special price; and  
3. Consumer relations and service staff made direct representations to consumers that Booktopia was not going to remedy any faults or allow consumers to obtain refunds if those consumers failed make to contact Booktopia within two days of delivery.

Booktopia also had an overarching clause which stated that their Terms of Business “included rights that the consumer was entitled to under the Australian Consumer Law.” Regardless of this clause, Booktopia continued to refuse refunds for consumers who did not contact them within a two-day period.

Overall the ACCC found that on each of the above representations, Booktopia was in contravention of:

1. Section 18(1) of the ACL by engaging in misleading and deceptive conduct; and
2. Section 29(1)(m) of the ACL by making a false or misleading representation concerning the existence or effect of a consumers’ rights.

The steep penalty imposed on Booktopia is a stark reminder that the ACCC will enforce harsh penalties on those businesses which restrict or infringe on the consumers rights. Breaches of the ACL are taken seriously, and businesses found to be in breach can expect harsh financial penalties.

If you would like to discuss a false or misleading representation, or any other corporate concern, with someone in Holman Webb’s Business, Corporate and Commercial team, please don’t hesitate to get in touch with Partner Tal Williams today.