A small Queensland retail business that sold children’s clothing via Facebook has been fined $3000 for failing to give her customers the products they paid for.
Trading under Indiana Sage Designs on Facebook, Rebecca Claire Molenaar pleaded guilty to 11 counts of accepting payment without supplying goods, in breach of the Australian Consumer Law (ACL).
It’s another reminder to retail businesses of all sizes and forms that they must adhere to the ACL.
Pine Rivers Magistrates Court handed down the fine earlier this month after the Queensland Office of Fair Trading received more than 40 consumer complaints that forced it to launch investigations against Indiana Sage Designs.
Molenaar operated her business on Facebook and was found to have accepted payments from 11 affected consumers for orders of children’s clothing and accessories between late 2014 to early 2015.
The items were supposed to be delivered to her consumers after being imported from overseas but they never showed up.
Despite being issued an invoice with a proposed delivery time of three to four weeks, affected consumers were not offered a refund and not given their goods.
Molenaar claimed she couldn’t deliver them because they’d been picked up by Australian Customs.
But the court considered this to be “demonstrably false”, highlighting that the items were seized before any of the affected consumers had placed their orders.
Some affected consumers went to Indiana Sage Designs’ Facebook page and other sites calling out Molenaar for failing to respond appropriately.
Fair Trading executive director Brian Bauer said in a statement the conduct was disappointing.
“Online business owners must be aware of their obligations to consumers as set out in the Australian Consumer Law,” he said.
“People who set up social media businesses have to follow the same rules as bricks-and-mortar traders.
“The Office of Fair Trading has issued a number of warnings to consumers about the dangers of dealing with businesses who trade solely via social media, and this case is a perfect example of what can go wrong.”
Legal Vision practice leader Damien Timms told SmartCompany the consumer regulators, including the Australian Competition and Consumer Commission, are very vigilant in acting on such breaches so they’re not very common.
“The facts tend to indicate that there was clear evidence of breach,” he says.
“In my experience, it is unusual for the evidence to be as clear as in this case.”
Timms says while consumers are quite savvy and aware of their rights with online retailers, it’s important for both parties to understand the fine print associated with the ACL.
SmartCompany has contacted Molenaar for comment. Her business email account and Facebook page have been closed.
Dinushi Dias is a freelance journalist and a former StartupSmart reporter and multimedia content producer. She is the co-founder of Melbourne-based production house Dinushi & Power.
