Record ACCC fine hit’s Euro Solar, P&N, Worldwide Energy & Manufacturing
20 Jan, 2014
UPDATE 28th January 2014:
Since originally posting this story, the Federal Court has published the proceedings including a staggering and specific list of breaches and some specific trade restrictions. These restrictions have been the source of a lot of questions and I contacted the ACCC today to confirm several issues.
I had previously been advised that Nick Patel and the associated companies had been restrained from trading for a period of three years which was my interpretation and indeed that of numerous other readers of the court documents. This is in fact not the case and can now advise consumers that the restrictions on trade relate EXCLUSIVELY to misrepresenting the country of origin or making false testimonials.
So in a nutshell, Nick Patel and all the associated companies are able to trade in the solar industry as long as they don’t misrepresent or mislead for the next three years, pay their fines and post the required notices.
Let me say for the record that I don’t wish person or any company ill will. However, I am fully behind the efforts of all bodies who set out to enforce protection and penalties for persons or companies who deliberately set out to mislead and /or misrepresent. I am glad that a “warning shot has been fired over the bow” but frankly disappointed that despite all the evidence and findings, the court has not been able to effectively stop a company from trading who has such an appalling track record for deception.
Excerpt from the court proceedings follows:
1. Each of P&N, P&N NSW and WEMA be restrained for a period of 3 years from the date of this order, whether by itself, its servants, its agents or otherwise, in trade or commerce in connection with the supply or possible supply of solar panels, or in connection with the promotion of supply or use of solar panels, from making any representation to the effect that those solar panels are made in Australia, when they are not.
2. Nick Patel be restrained for a period of 3 years from the date of this order in trade or commerce in connection with the supply or possible supply of solar panels, or in connection with the promotion of supply or use of solar panels, from being knowingly concerned in or party to the making by a corporation of any representation to the effect that those solar panels are made in Australia, when they are not.
3. Each of P&N, P&N NSW and WEMA be restrained for a period of 3 years from the date of this order, whether by itself, its servants, its agents or otherwise, in trade or commerce in connection with the supply or possible supply of solar panels, or in connection with the promotion of supply or use of solar panels, from making any representation that purports to be a testimonial by any person, when it is not.
4. Nick Patel be restrained for a period of 3 years from the date of this order in trade or commerce in connection with the supply or possible supply of solar panels, or in connection with the promotion of supply or use of solar panels, from being knowingly concerned in or party to the making by a corporation of any representation that purports to be a testimonial by any person, when it is not.
5. Each of P&N, P&N NSW and WEMA, within 7 days of the date of this order, must take all reasonably practicable steps to remove from broadcast, publication, display or circulation any advertising or promotional material that conveys any of the representations referred to in the declarations at paragraphs 1 to 4 above.
Despite apparent growth and a vigorous advertising campaign, Australian based solar company P & N Pty Ltd (& P & N NSW Pty Ltd, Euro Solar Pty Ltd and Worldwide Energy and Manufacturing Pty Ltd (WEMA, formerly trading as Australian Solar Panel) just copped one of the biggest fines in the history of solar companies down under.
I’ll let you all be the judge of whether selling Chinese solar panels branded as “Australian Solar Panel” and naming one of your many entities as “Euro Solar” and selling Chinese equipment was misleading or not. Certainly, its refreshing to see the ACCC making sure that fake testimonials and misleading advertising will not be tolerated and I’d take a punt that the $145,000 fine they just got landed with would be a very substantial chunk of their profits, given their low pricing, relative to the majority of the market.
I was also quite stunned to see that many thousands of customer addresses are published on the Euro Solar website. There terms and conditions of trade don’t explicitly state that this will be the case if you buy from them so presumably they have managed to get some other signed privacy consent forms from many thousands of people in exchange for a very convenient map for solar panel thieves.
I’ll leave it you to decide whether their claim of “5,110 to 7,300 kWh/year” for a 2kW system is also false, especially given that pretty much every other calculator in the country says you’ll get around 3000-3650kWh/year; perhaps there is more than double the National solar radiation in their world?
The following Media release was issued by the Australian Competition and Consumer Commission on January 17th 2014.
The Federal Court has ordered by consent that P & N Pty Ltd and P & N NSW Pty Ltd (trading as Euro Solar) and Worldwide Energy and Manufacturing Pty Ltd (WEMA, formerly trading as Australian Solar Panel) pay combined penalties of $125,000, for publishing fake testimonials and making false or misleading representations about the country of origin of the solar panels they supply. This followed action by the Australian Competition and Consumer Commission.
The sole Director of P&N and WEMA, Mr Nikunjkumar Patel, was also ordered to pay a penalty of $20,000 for his involvement in the conduct.
Today the Court found that video testimonials published on Youtube by P&N and P&N NSW and written testimonials published by WEMA on its website were not made by genuine customers of the companies.
“This is the ACCC’s first litigated outcome in relation to the specific prohibition against fake testimonials under the Australian Consumer Law,” Mr Sims said.
“Consumers should be able to trust that testimonials give honest feedback about a consumer’s experiences with a service or product. If they are not genuine, consumers may be enticed into making a purchase that they would not have otherwise made.”
The Court also found that P&N, P&N NSW and WEMA made false or misleading representations to consumers that they manufactured or supplied solar panels that were made in Australia – when they were in fact made in China.
The misleading representations were made online, in newspapers and on television between November 2012 and September 2013 and were brought to the ACCC’s attention by competing businesses.
“Credence claims such as country of origin can be a powerful marketing tool for businesses, with consumers often prepared to pay a premium for products made in Australia,” ACCC Chairman Rod Sims said.
“Businesses making misleading representations can harm consumers by influencing them to purchase products, sometimes at a premium price, they otherwise wouldn’t choose to. They can also harm competitors who accurately represent their products by creating an unfair playing field.”
In his judgment, Justice Besanko found that the companies and Mr Patel engaged in careless and reckless conduct and knew that the representations made were both false and misleading.
His Honour also found that it was “suggested in some of the advertisements that not only were the solar panels made in Australia but that customers or potential customers ought to be supporting them because of that fact” and that these representations “were a central part of the respondents’ business and marketing strategy”.
In addition to penalties, the Court also made other orders by consent including declarations, injunctions, corrective advertising and a contribution towards the ACCC’s costs.
Media team – 1300 138 917
Post expires at 2:16pm on Tuesday January 20th, 2015