Hearing aid retailers Oticon Australia and Sonic Innovations have been ordered by the Federal Court to pay $2.5 million in penalties after being accused of misleading pensioners through false advertisements.
The two major companies made headlines earlier this year over the printing of three advertisements for hearing aids that were published on 85 occasions in newspapers around Australia from June to November 2017. Thousands of pensioners fell victim to the misleading information, with many purchasing the devices sold by AudioClinic and HearingLife clinics under the Australian Government Hearing Services Program.
In September this year, the ACCC began its proceedings against Oticon and Sonic, with the companies admitting to the publishing of three false statements.
Oticon and Sonic had claimed people would no longer miss any conversations with the hearing aids, when in fact this may depend on a person’s individual circumstances and the nature of his or her hearing impairment. The retailers also misled buyers by suggesting the free hearing aids included wireless technology that would allow users to connect them to digital devices like televisions and mobile phones, when they actually had to pay extra for the additional accessories.
On top of this, Oticon and Sonic explained that pensioners would only receive a free hearing aid if they booked a hearing test before a specific date, when really there was no time limit.
However, the investigation did not uncover any evidence that HearingLife and AudioClinic planned to intentionally deceive or mislead any consumer.
ACCC Commissioner Sarah Court described the false advertisements as ‘unacceptable’ as many of the pensioners targeted were vulnerable due to their age and hearing loss.
“The misleading representations by Sonic and Oticon created a false sense of urgency for these consumers to book a hearing test and led them into a sales process based on incorrect information,” she said in a statement.
“This conduct is unacceptable particularly because it targeted vulnerable pensioners. The decision from the Federal Court sends a strong message to the hearing aid industry about the importance of ensuring all representations to consumers are accurate and not misleading.”
Oticon Managing Director (Retail) Janet Muir said during the 2017 advertising period, more than 1,200 customers reported a 98 per cent customer satisfaction rating of their services and hearing healthcare by the qualified clinicians.
She added that there have been no questions about the company’s clinical hearing health care, or the care that their clients experience in their clinics.
“We have the utmost respect for older Australians, and we are committed to ensuring that they are supported in their desire to live healthy and fulfilling lives. Each client’s clinical care is fundamental to our healthcare approach and is not part of the ACCC’s concerns,” Muir said in a statement.
“Last year we were the first major hearing health care provider to change its clinician remuneration structure in response to the concerns raised by the ACCC regarding the whole industry’s use of sales commissions and sales remuneration targets.”
As well as being fined $2.5 million, the court ordered by consent that Sonic and Oticon offer refunds to customers who purchased ConnectLine and SoundGate3 accessories. They must also publish a corrective notice in a nationally circulated newspaper and establish an Australian Consumer Law compliance program.
It is estimated that 80 per cent of hearing aids supplied in Australia are provided under the Australian Government Hearing Services Program (the Hearing Program), which provides access to subsidised hearing services and devises to pensioner concession card holders, veterans and defence force personnel. Vouchers can be used to obtain fully-subsidised hearing devices, or to cover some of the cost of partially-subsided hearing devices.