Ozdirect misled consumers, rules Federal Court

ACCC alleged online retailer engaged in misleading conduct

The Federal Court of Australia has found that online retailer, Ozdirect Online Brands Pty Ltd, engaged in misleading and deceptive conduct with its Web sites including Ozdirect.com, Ozdirect.com.au and ausbuys.com.

Justice Rares stated that Ozdirect had made misrepresentations to consumers, including about the availability and likely delivery times of items advertised for sale, as well as the reasons for the delay in delivery of goods.

"Obviously such conduct is commercially unacceptable as well as being misleading or deceptive,” said Justice Rares in his judgment. He also noted that “such dishonest conduct cannot be permitted or encouraged.”

The ruling came after Australian Competition and Consumer Commission (ACCC) action taken against the online electronics retailer and its director, Paul Albright, in July 2009, alleging conduct that breached sections of the Trade Practices Act 1974. "Other online retailers need to be aware that if they take payment from consumers for goods that they are not able to supply, they will risk similar court action by the ACCC,” said ACCC chairperson Graeme Samuel.

The court found that Ozdirect had made a number of misleading statements in regard to consumer rights, including how consumers who wished to seek a refund for faulty goods had that they only had three days to make a claim, and would only be entitled to a refund by way of a credit note.

Justice Rares found that Ozdirect's conduct was misleading or deceptive and contravened sections 52, 53(g) and 58 of the Trade Practices Act, and that Albright was knowingly concerned in that conduct. According to the ACCC, Ozdirect Online Brands Pty Ltd has ceased trading and Albright’s whereabouts are currently unknown. The ACCC said that a substantial number of Ozdirect customers are still waiting for a refund for goods they have purchased but never received. The ACCC advises customers awaiting a refund and who paid using a credit card to contact their bank about the possibility of seeking a charge-back.

As part of the Australasian Consumer Fraud Taskforce's Fraud Week the ACCC will issue a new publication providing online shopping tips for consumers.

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