ACCC Proceeds Against Refund Home Loans

The Australian Competition and Consumer Commission is taking action against Refund Home Loans claiming the franchisor misled franchisees regarding a ‘special’ relationship with the ACCC.

The ACCC has taken particular exception to the suggestion by the franchisor to franchisees that its conduct was approved by the ACCC.  

With 300 franchisees and the inference that the franchisor’s handling of disputes is not acceptable to the ACCC there are now calls out to franchisees to cooperate with each other in their handling of grievances.

Refund Home Loans first came to the attention of Australian franchisees with the submission by Rachael Neilson to the Federal Inquiry into the Franchising Code of Conduct.

While no one is suggesting there are no quality franchise systems in Australia it is suggested that they are mostly difficult for the uninitiated to detect amongst the far greater array of dangerous offerings where all make the same claims of quality.  Existing network franchisees often become unwittingly or knowingly complicit in the scam. 

Unbiased industry participants state that disclosure requirements are deceiving while misrepresentation is a common commodity with minimal and rare penalty.  The horror history of Australian franchising is sampled in many of the recent Federal Inquiry submissions and in much of the transcripts of public hearings.

Experienced pro-reform franchisees, industry and legal experts in Australia and apparently even fair-minded politicians and media remain concerned that the ACCC continues to purport to have some power to perform more than a perfunctory slap on the wrist for franchisors that behave badly and break the law.  The problem is that the ACCC has a combination of little legislated power and minimal funding when it comes to franchising.  Spanking is cheap but it does provide positive spin for the Minister.

Does this apply to Refund Home Loans and their franchisees?  Most probably! It is typically impossible to get the ACCC to take action against any franchisor so people would suspect they might have a case.  That is; unless the ACCC is relying once again on the inability of their target to fund a defence. 

The even greater concern for the broader franchisee community is that the ACCC seems intent on misleading franchisees in dispute to believe they can achieve a worthwhile outcome through the ACCC investigation process.  Historically that happens as often as a Mars landing.

Furthermore, the ACCC becomes virtually a deliberate and distraction to those naïve franchisees that wait many months, and longer, for the magic of an ACCC slap on the wrist to provide absolutely nothing instead of those franchisees who can afford one to go and get a results-driven, Franchising Experienced lawyer.  For the rest there is no hope and the ACCC is complicit in the rolling carnage.

Why people believe that there is protection is understandable.  The only real protection is what a prospect must expend in a thorough ‘killer’ pre-investment investigation.  Other than that it would appear to only be what the franchisee can afford at Court. 

The ACCC effort is usually a time-costly charade that leaves the franchisee to be a future target for the ever so slightly embarrassed franchisor.

Franchisees in dispute need to find out how to submit an acceptable formal complaint to the ACCC.  That is as important as following the Code.  Then they must move on to making their own justice or they must walk away.   And this situation is not going to change in Minister Emerson’s time of power.

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