In light of the current global climate, green building promises have been extensive as an increasing amount of firms in the industry try to jump onto the ever-growing green bubble. From product claims, to delivery techniques, it seems as if everyone is trying to cash in on the action.
But how do we know if what they claim is true, and what are the consequences for companies that make fraudulent claims?
In a recent Federal Court ruling, the highest penalty for misleading conduct this year with a hard hitting $5.26 million fine; the price of miscommunication proving to be a heavy toll.
Although unrelated to the construction industry, it provides wake-up call for all companies that are making claims they simply can’t meet. The penalty was handed down to Optus who tried to have the benefit of misleading advertisement headlines while purporting to correct the misleading impression.
The court was scathing in rejecting arguments that persons reading the advertisement would understand the purported disclaimer
“Contrary to the submission, it would only be exceptionally gifted individuals who would grasp the full import of those words on first seeing them in the advertisement. This advertisement plainly misleads consumers into thinking that they will receive 150GB of broadband when they are getting no such thing unless they assiduously ensure that they exhaust all of their off-peak usage allowance before exhausting their peak usage allowance. In other words, the disclaimer was ineffective” The Court stated.
These kinds of small print tactics are often used in advertising as a means of gaining greater exposure. Often the means behind these seemingly sneaky advertising strategies are not malicious or overtly misleading, simply tactical marketing steps taken without reflection to focus the advertisement on the most attractive features. Other times they are simply misleading. In either scenario it is clear that those found guilty of this offence will be punished severely.
“The principal purpose of a financial penalty in this context is, as French J has observed, ‘to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act’. Court should not leave room for any impression of weakness in its resolve to impose penalties sufficient to ensure the deterrence, not only of the parties actually before it, but also of others who might be tempted to think that contravention would pay, and detection lead merely to a compliance program for the future,” The Court said.
Although the courts found that “little loss or damage has been suffered by consumers on this occasion” they still imposed the $5.2 million fine referable to the profit that might have been gained by Optus as a result of campaigns that ran from Anzac day 2010 until October of the same year.
The case has ramifications for all those who deal with the public or who advertise to attract customers. Offers must now be carefully cast to avoid being viewed as misleading. Qualifications which are in small print and not able to be quickly and confidently understood will not wash.
The action by the Competition Watchdog is overdue, with no one remembering the “big safe and friendly” advertisements of Estate Mortgages just before they went into bankruptcy with massive debts.
While it is imperative for any competitive industry to be able to sell its green credentials, it is even more important that they be able to back their claims, or face legal consequences.
In these days of competition for lessees and for business, it will be harder and harder to escape if the green status of the building is exaggerated or promoted prior to it being fully earned. Promoting green options as part of the superior and healthy environment of a new development will be the subject of scrutiny if it is over pitched and unsupported by hard evidence.
