The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against the franchisor of Electrodry Carpet Cleaning, alleging the company posted fake online testimonials.

Electrodry is a large carpet, drapery, grout and upholstery cleaning service with over 100 Australian franchises. The ACCC claims that the franchisor:

  • urged franchisees to post false glowing reviews on websites including Google, Yelp, Word of Mouth Online and True Local;
  • provided sample reviews to franchisees as templates;
  • requested that reviews be made on mobile phones so that they would be linked to different IP addresses; and
  • offered monetary prizes to franchisees who posted the highest number of reviews.

It is argued by the ACCC that the actions of the franchisor constitute false and misleading representations, and that the franchisor induced Electrodry franchisees to make them.

The ACCC is seeking declarations, penalties, injunctions and corrective notices.

The ACCC has outlined guidelines for businesses to manage online reviews and has been working closely in recent years with state and territory fair trading authorities across Australia to target misleading reviews.