Harvey Norman has promised to continually review its trade practices compliance program following action by the ACCC dating back to 2002 which alleged the big retailer mislead consumers during a pre-GST advertising campaign for accounting software.
In 2002, the ACCC took action against three companies in the Harvey Norman group, Harvey Norman computers and communications GM John Slack-Smith, fellow executive Paul D'Ambra and 15 franchises alleging bait advertising and misleading and deceptive conduct in breach of the Trade Practices Act.
Immediately before the introduction of the GST national catalogue, TV and radio advertising was conducted for Harvey Norman Computers and Communications franchise stores promoting Quicken QuickBooks accounting software for $199 that included a bonus $900 software bundle.
The ACCC alleged that the promotion was advertised when parties were aware that none of the bonus software bundle "was available or was available in insufficient quantities to meet customer demand."
"The ACCC further alleged that representations made in the same advertising mislead consumers in relation to the eligibility for GST-related taxation benefits on purchases of digital cameras and approval of goods for GST Start-up Assistance from the Federal government," the ACCC said.
Harvey Norman Holdings subsidiary Derni has consented to declarations made by the Federal Court that it had "made misleading and deceptive representations in contravention of section 52 of the Act and in advertising the Quicken Quickbooks promotion for the benefit of Harvey Norman stores, had also been knowingly concerned in bait advertising by the stores in contravention of section 52," a statement said.
The retailer would also review its compliance program with the help of an independent professional and arrange for an independent audit of its program for three years.
The undertakings also included a "statement of regret" by companies in the Harvey Norman group to the ACCC in relation to the circumstances that led to the proceedings. In addition, a $270,000 contribution to the ACCC's costs was agreed, the ACCC said.
ACCC chairman Graeme Samuel, said Harvey Norman now recognised it must have effective compliance procedures in place to avoid breaches of the Act.
"This particular relates to misleading and deceptive conduct that is so harmful to consumers. Harvey Norman has expressed a willingness to improve on its past relationship with the ACCC," he said in a statement.