Home builder Metricon’s Queensland arm hit with $800,000 fine over misleading customers about pool and Bali hut inclusion

The Queensland division of Metricon Homes has been ordered to pay $800,000 in penalties after misleading buyers that some of its new home packages came with a swimming pool and Bali hut. 

Photos of these features were included in brochures that promoted the homes which were not available or not available at the "at the price represented in the brochures".

The $800,000 fine was handed down by the Brisbane Federal Court following action taken by the Australian Competition and Consumer Commission (ACCC).

In response, Metricon CEO and director, Mario Biasin said: “We take our responsibilities to consumers seriously. Comprehensive steps have been taken to address the concerns of the ACCC. Specifically, we have adopted a rigorous review of our advertising and promotions and reviewed our trade practices training program and policies.”

Metricon added that it had co-operated fully with the ACCC and has given undertakings that "for a period of three years, it will ensure that its advertising and promotional material conforms to certain requirements agreed with the ACCC".

It is one of the biggest penalties handed down this year on the back of  ACCC action following on from the $2 million fine imposed on Energy Watch in July, also for misleading advertising.

Metricon Qld agreed that some of its advertising and promotional material was false or misleading.

The builder was also ordered to pay $50,000 towards the ACCC’s costs.

Justice Collier also declared that Metricon Qld had breached the Trade Practices and Australian Consumer Law.

The court accepted undertakings provided by Metricon Qld that for a period of three years it would not make similar misrepresentations.

Commenting on the decision, ACCC chairman Rod Sims said other home building companies should take the penalties ordered in this case as a serious warning.

"Photographs and glossy brochures that promote products should be of what the consumer will be supplied at the advertised price, not an upgraded package that would ultimately cost the consumer much more,” said Sims.

In a statement, the ACCC said it was particularly concerned with some photographs in Metricon Qld's brochures that included swimming pools and bali huts adjacent to the house, “when Metricon Qld does not supply these features or include them in packages to its customers, and Metricon Qld did not make it clear that these features were not part of the package”

In ordering the penalties, Justice Collier found that the contravening conduct involved participation by senior management of Metricon Qld and observed that its competition and consumer compliance programs in place at the time failed to prevent the contravening conduct.

"If companies run promotions or advertise savings then those savings must be real, not a lure to attract customers to their products over competitors who might be doing the right thing," said Sims.

"This is also another reminder to traders that fine print is not an antidote to misleading headline representations."

The ACCC was concerned with a number of misrepresentations Metricon Qld made in its promotional material and on its website between January 2009 and August 2011 including  it advertised a 'Build Time Guarantee' that did not automatically apply to the majority of houses offered by Metricon Qld during that period.