See previous post for background.
In June 2014, the Victorian Tribunal (VCAT) waived any obligation for my friend L’s business to pay $3,030 to Publicity Monster (PMAU) and ordered PMAU to refund to L the $1,317.80 he had paid them. Publicity Monster is part of the Search Results Group and a business name of PMAU Pty Ltd.
Despite L obtaining this order from VCAT, and transferring that order to a court judgment, PMAU initially failed to pay. L engaged a law firm to attempt to enforce the court order. Once papers were filed that would require a representative from PMAU to attend court and explain the company’s financial situation, PMAU contacted L’s lawyers and offered to pay up if L agreed to keep details of the case and outcome confidential. L refused this offer. Shortly afterwards PMAU made the payment to L (without any confidentiality agreement). In addition to the $1,317.80, PMAU paid an amount of over $600 in legal costs.
L’s experience and that of other small business people illustrate how our laws are often inadequate to dissuade a ‘business model’ similar to that of PMAU. While each individual has access to the legal system to resolve their individual dispute (albeit sometimes at a cost), the tools available to regulators to penalise or stop poor practices are limited – particularly when the ‘victims’ are small businesses.
Applying unfair contract terms to business contracts (a move currently being considered by the Federal Government) would be a step in the right direction. However, the Government could also consider introducing laws that enable regulators to prohibit certain unfair practices. The UK has such laws. Regulators should also have powers to stop a business continuing to sign up new customers, while the business is reluctant to pay refunds when so ordered by a court or tribunal.