NSW Fair Trading commissioner Rod Stowe is warning businesses not to sign contracts for accelerated search engine services without doing appropriate checks.
Accelerated search engine services offer online advertising packages designed to increase the profile of a business, with some promising high rankings on search engines or a money back guarantee.
Mr Stowe said NSW Fair Trading had received hundreds of complaints and enquiries over the past two years from businesses that have signed expensive contracts with little or no result. Complaints relate mainly to unsatisfactory or non-performance of a service, cancellation of the contract or refunds,” he said.
“Complaints indicate that packages can cost from several hundred dollars up to more than $4,000.”
Mr Stowe said persuasive sales pitches over the phone were a trap. “Don’t agree to any offers over the phone,” he said. “Business listings on some search engines are free and take very little time to set up.”
Mr Stowe said businesses entering into contracts, particularly for the purchase of services, should carefully read the contract and the terms and conditions and do their own research about the trader’s ability to deliver what they promise.
“Fair Trading also recommends businesses seek legal advice on contracts before signing them.”
Under the Australian consumer law it is unlawful for a business to make false or misleading representations about goods or services when supplying, offering to supply or promoting those goods or services.
Business must not make false or misleading representations about the performance characteristics or benefits of goods or services.
Acting NSW Small Business Commissioner Candace Barron said small businesses need to be wary of offers that sound too good to be true. “Small business operators need to be sceptical about grand promises. Even money back guarantees may not protect you, since unscrupulous operators often disappear,” Ms Barron said. “It is best to talk to a range of people before making significant business decisions.”
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