Sydney-based lift supplier Lift Shop and its founder Les Katz has admitted to breaching the Trade Practices Act and misleading a customer, following an ACCC investigation that included the examination of about 800 separate lift sales.
Lift Shop, which has made SmartCompany’s Smart 50 list for the past two years, agreed to accept Federal Court declarations that it breached the TPA after it “twice substituted an ordered platform lift with a different model from another manufacturer, which had different features, and without the knowledge or consent of either customer.”
Katz told SmartCompany this morning that the matter related to one lift ordered back in 2006 and another ordered in 2007, when Lift Shop was buying its lifts through an Irish supplier.
After a number of customer complaints about the Irish lifts, Lift Shop moved to a British supplier in 2007 and it was lifts from the British suppliers that were delivered an installed in late-2008.
However, Katz admits the customer was not informed of the change in product, which looked different and had different features to the product originally ordered.
“The better machine looked different and the customer wasn’t informed. We misled by giving them something that looked different but they were better performing machines in my opnion.”
Katz was ordered to pay $20,000 towards the ACCC costs and agreed to make ex gratia payments totalling $7,000 to the two affected customers.
Katz says the “tiring and nightmarish” ACCC investigation was sparked by a disgruntled Lift Shop employee and involved an examination of about 800 supply deals, with only two found to have issues.
Given his cooperation with the consumer watchdog, Katz feels a media release issued by the ACCC yesterday entitled “Lift Shop and director ‘misled customers’” was harsh.
“What I did was wrong and I broke the law. [But] I think this was very harsh by the ACCC. It was two out of 800 instances. When I read this headline it makes it sounds like a pattern. There is not a pattern.”
He says Lift Shop informed its customers of the investigation some months ago and published an open letter on its website detailing the case.
But a spokesperson for the ACCC says the media release reflected the Court’s findings in the case. She said it is standard practice for the ACCC to issue a media release following a court decision that results from its investigations.
Katz has also been ordered to attend Trade Practices Act training and he says the case has already taught him a lot about the operation of the law.
“I learned a lot about the Trade Practices Act.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
