NSW Fair Trading is warning businesses not to sign up to firms that guarantee they can get you on to the first page results of search engines such as Google without doing appropriate checks first.
The warning follows NSW Fair Trading receiving hundreds of complaints and inquiries over the past two years from businesses that have signed expensive contracts with little or no result.
NSW Fair Trading Commissioner Rod Stowe said complaints about the firms – which practise what is called search engine optimisation, or SEO, on websites – related mainly to unsatisfactory or non-performance of a service, cancellation of the contract or refunds.
“Complaints indicate that packages can cost from several hundred dollars up to more than $4000,” he said. Mr Stowe also said persuasive sales pitches over the phone were “a trap”.
“Don’t agree to any offers over the phone,” he said.
“Business listings on some search engines are free and take very little time to set up.”
It is understood many of the complaints relate to Sydney company Publicity Monster (PM AU), run by former bankrupt and convicted hacker Tim Sabre.
Publicity Monster has been known to cold-call small businesses, pledging to make them appear in Google Places’ top seven search results for chosen keywords, but in many cases doesn’t deliver results and has both harassed and threatened businesses who complain.
In NSW alone, 99 applications have been lodged against Mr Sabre’s Publicity Monster at the NSW Civil and Administrative Tribunal, according to the latest figures provided to Fairfax. A further 20 have been lodged against Publicity Monster at the Victorian Civil and Administrative Tribunal, while another five have been lodged at the Queensland Civil and Administrative Tribunal.
Hundreds of other complaints are understood to have been lodged with NSW Fair Trading, which has the power to investigate Publicity Monster.
“NSW Fair Trading is continuing its investigation of Publicity Monster Pty Ltd and exploring all options available under Fair Trading legislation,” the regulator told Fairfax in a statement.
But it said its investigative powers may be limited because the contracts that businesses had with Publicity Monster were generally “business to business”, and this meant that they may not fall within the scope of the NSW Fair Trading Act 1987 and the Australian Consumer Law.
In his warning, Mr Stowe said businesses entering into contracts, particularly for the purchase of services, should carefully read the contract and the terms and conditions and do their own research about the trader’s ability to deliver what they promise before signing.
He also recommended businesses seek legal advice on contracts before signing them.
Acting NSW Small Business Commissioner Candace Barron said small businesses needed to be wary of offers that sounded too good to be true.
“Small business operators need to be sceptical about grand promises. Even money-back guarantees may not protect you, since unscrupulous operators often disappear,” Ms Barron said.
Under the Australian Consumer Law it is unlawful for a business to make false or misleading representations about goods or services when supplying, offering to supply or promoting those goods or services. Businesses must also not make false or misleading representations about the performance characteristics or benefits of goods or services, the law states.
In response to Fairfax questions, Mr Sabre said he didn’t think NSW Fair Trading’s investigation would find anything against his company.
“I am more than happy to cooperate,” he said.
He disputed the number of applications lodged against Publicity Monster in state tribunals, and said his company had been in contact with any customer who had a dispute with it.
Asked what he thought about Fair Trading’s warning, he said businesses “should always make informed decisions” before signing contracts.