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Ozdirect Online, Director Misled Consumers

Issued: March 01 2010
The Federal Court of Australia has declared that Ozdirect Online Brands and its director Paul Albright engaged in misleading and deceptive conduct over the offer for sale of electronic goods on websites including www.ozdirect.com, www.ozdirect.com.au and www.ausbuys.com.

The court orders follow Australian Competition and Consumer Commission action taken against the online electronics retailer and its director last July, alleging conduct in contravention of the Trade Practices Act 1974.

Justice Rares made orders declaring that Ozdirect accepted payment from consumers for goods it knew, or ought reasonably to have known, it would not be able to supply within a reasonable time. In his judgment, Rares noted that Ozdirect had accepted orders and payments from a significant number of customers while it was on credit hold with its suppliers.

The court also declared that Ozdirect had made misrepresentations to consumers, including about the availability and likely delivery times of items advertised for sale, as well as the reasons for the delay in delivery of goods.

In his judgment, in relation to these misrepresentations, Rares said: “Obviously such conduct is commercially unacceptable as well as being misleading or deceptive,” and later noted that “such dishonest conduct cannot be permitted or encouraged.”

The court also found that Ozdirect had made a number of misleading statements about consumer rights, including that consumers who wished to seek a refund for faulty goods had only three days to make a claim and would only be entitled to a refund by way of a credit note. Ozdirect and Albright did not attend the hearing, which was held in December last year.

Rares found that Ozdirect’s conduct was misleading or deceptive and contravened Sections 52, 53(g) and 58 of the Act, and that Albright was knowingly concerned in that conduct.

The court made injunctions restraining Ozdirect and Albright from engaging in conduct of the kind alleged in the proceedings.

The injunctions include an order restraining Ozdirect from accepting payment for goods when there are reasonable grounds, of which it is aware or ought reasonably to be aware, to believe that it will not be able to supply the goods within a reasonable time, and an order restraining Ozdirect from making misleading representations to consumers regarding the availability of goods advertised on its websites. Ozdirect is also restrained from making certain misleading representations regarding the provision of refunds to consumers.

Ozdirect and Albright were also ordered to pay the ACCC’s costs.

ACCC chairman Graeme Samuel said this judgment signals the court’s disapproval of the type of dishonest behaviour carried out by Ozdirect in taking consumers’ money and promising to supply them with goods that the company and its director knew could not be supplied because the company did not have sufficient credit with its suppliers.

“Other online retailers need to be aware that if they take payment from consumers for goods that they are not able to supply, they will risk similar court action by the ACCC,” Samuel said.

According to an ACCC statement, Ozdirect has ceased trading and Albright’s wherereabouts are now unknown.

 

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