Funeral services provider Alex Gow Proprietary Limited (Alex Gow Funerals) has paid a penalty of $13,320 after the ACCC issued it with an infringement notice for allegedly making a false and misleading representation about the price of its funeral services and the fees that consumers are required to pay.
Alex Gow Funerals paid the penalty after the ACCC had reasonable grounds to believe it had contravened the Australian Consumer Law by falsely representing in an invoice that a $400 'Estate Fee' was payable for its funeral and/or cremation services, when it actually was a late payment fee payable if the customer did not pay the bill on time.
Between at least July 2020 and May 2021, Alex Gow Funerals usually included an 'Estate Fee' in the amount payable for invoices it issued to consumers for funeral services.
The ACCC is concerned that the term 'Estate Fee', widely used in the funeral service industry, misleads consumers as it is not clearly described as a fee for late payment of an invoice.
"Funeral businesses must clearly describe the purpose of all fees included in their invoices, as well as the total price and due date for the invoice. If a fee applies for late payment of an invoice, the late payment fee must be clearly stated and should not be included in the total amount due on invoices," ACCC Deputy Chair Delia Rickard said.
Since January 2020, 40 consumers paid the 'Estate Fee' in error and had to be refunded.
"While Alex Gow Funerals provided most these refunds before our investigation, this case highlights the need for sufficient and accurate information so as not to mislead consumers about funeral pricing during what is already a very difficult and emotional time," Ms Rickard said.
Alex Gow Funerals has amended its invoices since being contacted by the ACCC, so that they no longer refer to an 'Estate Fee' and instead refer to a 'Late Payment Fee'.
Alex Gow Funerals has also amended the terms of its contract with consumers for the provision of funeral services, after the ACCC raised concerns that certain contract terms may be unfair.
The contract terms which the ACCC was concerned about included excessive interest fees for late payment and broad indemnity clauses, which were not reasonably necessary to protect Alex Gow Funerals' legitimate interest in recovering costs.
"Unfair contract terms also appear to be a widespread problem in the funerals services sector which we are looking closely at, together with false and misleading pricing representations," Ms Rickard said.
Background
Alex Gow operates funeral homes across four locations in Brisbane, Queensland.
Competition and consumer issues in the funeral services sector is a current enforcement and compliance priority for the ACCC.
Note
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law, which also sets the penalty amount.
The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain consumer protection provisions in the Australian Consumer Law.
