18 December 2024
3 min read
#Corporate & Commercial Law, #Technology, Media & Communications
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The Australian Competition and Consumer Commission (ACCC) has announced it is prioritising enforcement action against National Disability Insurance Scheme (NDIS) providers that breach the Australian Consumer Law (ACL). The ACCC is particularly concerned with misleading advertising practices by NDIS providers and will closely monitor and investigate those who engage in such conduct.
The ACCC is particularly concerned with advertising which falsely represents the goods or services of a NDIS provider as either being affiliated, approved or completely covered by the scheme when they are not.
Some examples of NDIS advertising which could be considered misleading or deceptive under the ACL include:
noting that these goods or services are not covered by NDIS funding.
Representations which could be considered false or misleading under the ACL include:
These representations falsely convey to consumers that providers are affiliated with the NDIS, or that further goods or services are approved when they are not.
The ACCC has advised that it is actively investigating multiple NDIS providers for breaches of the ACL and anticipates taking legal action in the near future.
While the ACCC’s focus on the NDIS space may be more recent, this is not the first time it has taken action against businesses for similar misleading advertising practices.
Last year, the ACCC was successful in its action against Employsure Pty Ltd for false and misleading representations in its online ads that it was, or was affiliated with, a government agency.
In 2014, the ACCC was successful in its action against Zen Telecom Pty Ltd for making false and misleading representations that it was acting on behalf of Telstra or other associated companies, when in fact it had no connection to Telstra.
NDIS providers who face action from the ACCC for breaching consumer law could incur significant civil penalties, including financial penalties of the greater of either $50 million, or three times the value derived from the relevant breach, or where the value cannot be determined, 30 per cent of the company’s turnover during the contravening period.
The test applied in determining whether representations are false or misleading is objectively determined by whether ordinary or reasonable individuals are likely to be affected by the conduct, for example, NDIS participants or their families. As this can be subjective and broad, it is important that all NDIS providers are vigilant and carefully consider all marketing and advertising materials to ensure they are compliant with the ACL. Any statements that are made should be factually accurate and clear, to not mislead or falsely represent NDIS participants or those seeking such services on behalf of participants. It is important to keep in mind that this cohort may be a particularly vulnerable class of people.
Our team of experienced commercial lawyers are able to assist your business in reviewing current and past marketing materials to ensure compliance with relevant advertising and consumer laws.
If you have any questions regarding this article, or would like us to conduct a review, please get in touch with our team below.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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