ACCC takes court action against solar companies accused of using fake online reviews

The Australian Competition and Consumer Commission is taking action against two solar panel companies, accusing them both of making misleading claims about the origins of solar panels sold to customers.

The consumer watchdog is also alleging customer testimonials which appeared on the companies’ websites and YouTube pages weren’t made by genuine customers – an area in which the ACCC has become increasingly interested over the past several months.

The move comes as the solar industry remains in a state of flux. Several businesses have collapsed as state tariffs have been reduced, with many also suffering from an influx of cheap panels sold from Chinese manufacturers.

The ACCC said in a statement it has issued proceedings in the Federal Court against Euro Solar and Australian Solar Panel over allegedly false or misleading claims made regarding the origins of both companies’ solar panels.

Both companies were contacted by SmartCompany this morning, but neither were available prior to publication. Action is also being taken against an individual, Nikunjkumar Patel, for allegedly being concerned with or a party to the accusations.

ACCC chairman Rod Sims said in a statement the case is an example of how the watchdog is prioritising the policing of fake online reviews.

“Consumers should be able to rely on the accuracy of labels, especially when they are prepared to pay a premium for products made in Australia. Misleading credence claims can have a significant impact on the competitive process and hurt the local economy,” he said.

“Australian consumers are increasingly relying on online consumer reviews to inform their purchasing decisions. Fake testimonials can mislead consumers as a great deal of trust is often placed on these reviews. They also harm competitors who do the right thing.”

The action follows a warning from ACCC deputy chair Delia Rickard in March, who said exposing the use of fake reviews will be a priority for the organisation.

The use of fake reviews is a significant threat for businesses. Disgruntled customers can encourage others to write reviews, even when they haven’t bought anything from the companies in question.

The high level of influence inherent in online reviews means a few negative reports can damage a company’s potential business – which is why the ACCC has begun to act.

The importance of cracking down on fake reviews has become so that serious major reviews site Yelp issued a new strategy last year to ban companies it believes are using the fake testimonials.

The ACCC has said the matter is filed in Federal court and is listed for a scheduling conference on July 8.