Start-ups warning over false association claims

Start-ups have been warned not to falsely claim that they are members of a trade association following a case brought by the consumer watchdog against a small business.

The Australian Competition and Consumer Commission fined ACA Constructions Pty Ltd, trading as Roll Away Shutters, $6,600 for claiming membership of the Master Builders Association and the Housing Industry Association on its website.

The business wasn’t a member of either organisation and the ACCC decided it had breached the Trade Practices Act 1974, which bans companies from claiming to have a sponsorship, approval or affiliation they do not have.

ACA Constructions paid the infringement fine, but the ACCC warned that it will take court action against other businesses that fail to comply with the Trade Practices Act.

An ACCC spokeswoman told StartupSmart that the consumer watchdog had previously taken action against estate agent businesses that falsely claimed to be part of a trade association. She added that the ACCC will look to act on the problem of false claims with the expanded investigatory powers handed to it last year.

Graeme Samuel, chairman of the ACCC, says: “Building improvements and renovations are a significant expense and membership of industry associations may be a factor which influences consumer and business decisions.”

“Traders should not make false membership or industry claims as they risk contravening the Act.”