A Langford air conditioning business operator has been fined $15,000 by the Perth Magistrates Court for accepting large deposits from three consumers but failing to install the systems, despite numerous empty promises.
Vernen Naicker, trading as Desti Cool AC, was fined $5,000 on each of the three offences and ordered to pay $512 in costs. He pleaded guilty to breaching the Australian Consumer Law by accepting payment but failing to supply the goods or services within an agreed or reasonable timeframe.
Mr Naicker owes the three consumers a total of $15,780, the details being:
- In June 2019, a Bullsbrook consumer accepted a quote of $9,350 and paid the full amount in three payments. There was no installation and Mr Naicker refunded only $820, paid in instalments, leaving $8,530 still owing.
- In January 2020, a Wattle Grove consumer accepted a quote of $3,800 and paid the requested 60% deposit of $2,280. A few days later, Mr Naicker asked for an additional payment of $1,070 which was paid. Several installations dates were postponed due to money transfer delays and the system and some parts not being available, according to Mr Naicker. No installation took place and no refund of the $3,350 owing was provided.
- In January 2020, a Stirling consumer accepted a quote of $4,500 and paid the requested 60% deposit of $2,700. A few days later, Mr Naicker asked for an additional payment of $1,200 which was paid in person when he attended an ATM with the consumer. Several installation dates were postponed for various reasons. No work was commenced and the $3,900 owing has not been returned.
Commissioner for Consumer Protection, Gary Newcombe said paying too much money upfront puts consumers in a vulnerable situation.
“In this case, a 60% deposit is far too high and the subsequent requests for even more deposit money is totally unacceptable,” Mr Newcombe said.
“Paying large deposits puts consumers at risk if the business fails to deliver or goes broke. Smaller deposits will limit that risk and provide the consumer with greater bargaining power if something goes wrong.
“We strongly urge consumers to never pay the full amount upfront and only pay the balance when completely satisfied. For larger jobs, pay in instalments as goods are delivered and stages of the work are finished.
“Businesses should ensure they have sufficient cash flow or credit arrangements in place with their suppliers so large deposits are not required, especially for jobs with a quick turnaround.
“Paying by credit card is an option worth considering as it provides the protection of getting a chargeback if the goods or services aren’t delivered.”
Consumers who pay a deposit but don’t get the goods or services can lodge a complaint on the Consumer Protection website. Enquiries can be made by emailing consumer@dmirs.wa.gov.au or calling 1300 30 40 54.
