CompassCorp Pty Ltd trading as Compass Claims (Compass) will amend its advertising and sales practices following an investigation by the ACCC. Compass is a credit hire business which provides hire cars to consumers who are not at fault in car accidents. Compass is one of the largest providers of these services in Australia.
The ACCC considered Compass was misrepresenting in brochures, its website and in phone calls that consumers who engaged Compass would not be liable for hire car charges or associated costs. Although Compass waived those charges, its contract only required Compass to do so if it was able to recover the charges from the at-fault party or their insurer.
The ACCC also considered Compass represented that consumers would not have to take any further steps to recover costs arising from their car hire. Instead, a consumer was required to assist Compass, which could include authorising court action in the consumer’s name, providing witness statements and attending court.
Compass cooperated with the ACCC’s investigation and has made several changes to its advertising, call centre procedures and sales practices to inform consumers of hire charges and their obligation to provide assistance.
“Businesses must not mislead consumers about any additional costs or obligations that may incur when using their services,” ACCC Deputy Chair Delia Rickard said. “If consumers are not responsible for an accident, they may be entitled to compensation for the costs of hiring a comparable vehicle while repairs are made. Credit hire businesses can help consumers access that compensation, however consumers should be aware of their obligations to that business if they accept that help. The ACCC will review the marketing and sales practices of other credit hire businesses and will pursue businesses that mislead consumers,” Ms Rickard added.
As part of the resolution of this matter, Compass has agreed to:
- Instruct Compass staff to read a script during the initial call with consumers to ensure consumers were aware they remain liable for the charges and must cooperate with Compass;
- Amend its website to remove misleading statements;
- Include detailed and prominent explanations in brochures that clearly state that consumers remain liable for the charges and must cooperate with Compass;
- Provide the full contract to consumers at an early stage, highlighting the key terms imposing liability for charges and the obligation to assist Compass so that the consumers have time to consider those obligations before committing to the service.