The Federal Court ordered the franchisor of the Electrodry Carpet Cleaning business to pay penalties of $215,000 for its involvement in publishing fake testimonials on the internet.
Following action by the ACCC, the court found that Electrodry posted and asked its franchisees to post fake testimonials on Google, Yelp and True Local.
This is a breach of the Australian Consumer Law that would also apply to any real estate agencies that adopted similar tactics.
In his judgement, Justice David Yates said that posting fake testimonials is serious conduct as it can mislead consumers and divert them from law-abiding rivals.
ACCC deputy chair Michael Schaper said online consumer issues remain an area of concern for the regulator.
“By manipulating or producing false reviews or testimonials, businesses mislead consumers who rely upon them when making purchasing decisions,” he said.
Earlier this year, Consumer Affairs Victoria accepted an enforceable undertaking from Accrue Property after it posted misleading information on its website that contravened the Australian Consumer Law.