ACCC reacts to tradie price-fixing scandal

Sydney hailstorms were the “perfect opportunity” to set minimum prices for damage repairs: tradies

tradie scandal

Two Sydney businesses are in strife after the Australian Competition and Consumer Commission (ACCC) discovered a Facebook group chat the watchdog alleges is price fixing.

A statement released by the ACCC condemns a Facebook discussion between representatives of two roofing businesses that said devastating Sydney hailstorms were the “perfect opportunity” to set minimum prices for damage repairs.

The comments were posted by Mark Lee Burtenshaw, director of ANZ Roofing, and Brent Cameron Callan-Kerkenezov, director of Ivy Contractors, which the ACCC says are used by “thousands of roofing providers in the greater Sydney area to advertise jobs and discuss industry issues”.

The companies concerned have acknowledged the comments may constitute an attempt to fix prices and could raise concerns about “concerted practices” that prohibit competition, according to Smart Company.

The court-enforceable undertakings provided to the ACCC by both companies include a commitment to prevent this behaviour in future and for the directors to undertake further compliance training.

The offending posts have been removed following the ACCC’s investigation and, as Mr Burtenshaw and Mr Kerkenezov have fully cooperated with the investigation, the ACCC will not commence legal proceedings.

The ACCC warns other businesses that similar discussions or price-sharing with competitors is prohibited from online platforms or private chats.

“The community will not just find this outrageous, it is also anti-competitive and illegal under Australian competition laws,” ACCC chair Rod Sims said in a statement.

“Businesses must remember that attempts by competitors to set prices or share pricing information, whether on social media or in any other forum, are likely to breach Australian cartel and concerted practices laws.”

Do you think these businesses got off lightly? Were you aware of such groups operating?

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    COMMENTS

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    4b2
    12th Dec 2019
    11:20am
    Good to see the ACCC are taking action. I only hope they take the same action with the financial sector. When will they take action with the petrol distribution sector?
    GeorgeM
    12th Dec 2019
    9:15pm
    Exactly my thoughts. Hope they can now start taking actions (including prosecution) against:
    Banks - Interest rates, etc
    Insurance companies - in particular Private Health Insurance providers
    Petrol companies
    Gas & Electricity suppliers
    Big Supermarket Retailers (both in dealings with their suppliers & customers)
    Road Toll companies
    etc.
    Wow, ACCC has some work left to do!
    Pass the Ductape
    13th Dec 2019
    7:54am
    Dream on!
    JoJozep
    12th Dec 2019
    11:59am
    Of course, all tradies who collaborate to fix prices are criminals the same as big business fixing prices and should see jail time. Many are small businesses so it's a matter of scale, but that doesn't mean they are less guilty. Taking advantage of unaware customers, the aged and other vulnerable people is not just disgusting, it's criminal.

    I take it this trend is becoming common amongst hire companies, as all they care about is internet advertising. The quality of the tradesmen they advise to answer requests for home work to be done is never checked, there seems to be no responsibility for what these "tradies" charge or how long they take to finish a job, especially when they take on two-three jobs at once.

    If you see advertisements on the internet for hire firms who get tradies to ring you with 3 quotes is fair enough, but as you don't know who they are or what jobs thy have done, you naturally go for the cheapest quote, only to find out they are scumbags who wouldn't know shite from clay. Often they lie about their abilities , they know they will never get a second job on the same house, so they do bugger all quality work, charge more than the original quote (they know the game that you don't) and stretch the job out for more pay.

    I suggest if you need someone to replace a fence, paint the house, fix leaking roofs, etc., if you are not familiar with the building trade, then seek help from a builder friend or tradesman you know and trust before committing to a job. This will ensure you get a fair price for a job well done, after all there is nothing wrong with your money that you hand over. These flyby night tradies often won't give you a written quote, nor an invoice on job completion, and often ask for cash. That puts you in strife, as you are legally at risk of the tradie not paying GST as he doesn't disclose his source of income. You are technically his employer, and you should make the effort to see his credentials (in writing), his insurances are up to date, and he is fit and healthy to perform the work. Also you are responsible to see he complies with building regulations and ensure he complies with Worksafe. I have personally seen a "tradie" replacing a roof gutter but not bothering to wear a safety harness and hooking up to a safety wire, even though it was provided. This was on a 2 storey house above a concrete floor!

    Remember , the onus to do all this background checking is on you. I strongly suggest for your own peace of mind and security, you employ a registered building firm and let them worry about the detail. There are small companies employing 2-3 tradesmen, who are registered and take full responsibility for a good job and back up their workmanship by giving some kind of guarantee over a determined period.

    If a Tradie does a small job and later problems ensue, you'll never see him again, especially if he's been paid. If there is enough interest, I'll do a simple flyer describing good trades:men/women and what they should do and how they present.
    Snowflake
    12th Dec 2019
    12:18pm
    No, prosecute them. If they hadn't been caught they would have ripped off thousands of customers. Just as bad as the multinationals and pertol companies. If you ripped off Centrelink I bet you would be prosecuted. Poor, really poor.
    floss
    12th Dec 2019
    1:47pm
    Australia is now one big rip off starting with our Federal government who condone it.
    Pass the Ductape
    13th Dec 2019
    8:00am
    No argument with that! The capitalistic system working beautifully - just as it was designed to do!
    Intellego
    12th Dec 2019
    1:57pm
    I hope the gouging scumbags will be prosecuted to the full extent of the law.
    aussie
    12th Dec 2019
    2:06pm
    good constructive information; too many people do not know how to get a good quote or a good tradesman/woman and you have outlined the method adequately.
    KSS
    12th Dec 2019
    3:39pm
    The problem of trades not doing a good job mostly lies with the state training programs in the first place and the state registration and licensing bodies second. Checking whether the trade is actually qualified and registered for the work you want done is no guarantee of quality workmanship. And when it does go pear shaped, the customer has no recourse against a system that protects the trade and not the victim. The entire system of training, registration, licensing and continuing education and improvement and maintenance of skills need a complete overhaul and a rebalancing of the complaints process and enforcement of case outcomes to give greater protections to the customer.
    Tanker
    12th Dec 2019
    3:44pm
    The best protection for a customer, be it of a tradie, a banker, a shop etc is the knowledge that if they break the law they will pay the price. Send one banker to jail, for example, will pull all the rest of them into line quicksmart.
    Tanker
    12th Dec 2019
    3:44pm
    The best protection for a customer, be it of a tradie, a banker, a shop etc is the knowledge that if they break the law they will pay the price. Send one banker to jail, for example, will pull all the rest of them into line quicksmart.
    auzie3136
    12th Dec 2019
    3:55pm
    I completely agree with you Snowflake too many of these people get off much too lightly.
    bobm
    12th Dec 2019
    4:58pm
    If you think Australia is bad TRY NZ they are worse.
    My last dealings with a Registered Building Company was for a replacement of a fixed window frame and glass.
    The builder's web page "ring me and I will give you a quote over the phone" Did that got a quote and asked if he would like to visit the site to ensure he was happy with the quote. "no it is o'k
    Quote of $500 plus GST. Job done account came for payment $2300.
    Went to arbitration and followed the instructions of the NZ Justice Department with a Stat Dec sign off at Bunbury WA Police Station JP as required.
    Arbitrator said that I was not on site at the hearing and would accept what the builder said. "" He doesn't give quotes over the phone". He LIED to the hearing and it took me 4 weeks to get a copy of the hearing.Too late to lodge an appeal I was instructed to pay the full amount of $2300
    to the builder. I may have been stopped at the NZ border on my next trip to my daughters home
    The ACCC is looking into the Tradie quotes good. I hope it is not a waste of time as per my NZ experience. I DO NOT TRUST ANY LEGAL HEARING IN A NZ ARBITRATION
    I can mention the Builders name however they may be a legal problem at a later date. I advise anyone do not trust a NZ builder in NZ or Australia
    Ar
    MICK
    12th Dec 2019
    9:13pm
    Its long overdue for the ACCC to go after some crooks. Mostly it refuses to act.
    The ACCC may want to look at how floor tilers are charging. $1500 for two days work? It seems to be the norm in my area and its highway robbery. About time a ceiling was set so that consumers were not savaged by tradies charging ridiculous prices for because there's a heap of work around. We all pay if we hire these guys. I absolutely refuse to pay those sorts of rates but others do and likely then lament about 'not enough money'.
    I've given up on the ACCC. As useless as breasts on a bull. Its a club.
    Pass the Ductape
    13th Dec 2019
    8:05am
    Tell it like it is MICK - the word is 'tits' - reads better!
    Cassius
    12th Dec 2019
    10:52pm
    Funny about that oil companies have been doing it for years and ACCC don't do a damn thing about it
    Fair Dinkum
    13th Dec 2019
    5:37am
    yes these tradies got of lightly some tradies rip of people with there charges they charge more than some specialist.
    when there is plenty of work they give outragous quotes and dont care if they get the job or not.plumbers and electricians are the worst
    Pass the Ductape
    13th Dec 2019
    8:16am
    Too true - and they wonder why people attempt to do the same kind of work themselves.
    JoJozep
    13th Dec 2019
    10:28am
    There are a number of issues here involving two parties. Legally, the promise to do work in accordance with a quote on the one hand and the agreement to pay for the work on the other, constitutes a contract between two parties. Let's call them the doer and the giver.

    In older times, the doer was well trained, experienced, and a capable tradesman. The giver was trusting and happy to pay for a job well done. Now the situation has changed.

    The doer may or may not be qualified, registered or experienced and takes advantage of background tricks to illicit unfair pay at ridiculous rates often $100-$150 dollars per hour. The giver usually has no idea if this is fair. At that rate, even working 40 weeks in a year, the salary could be as high as $240,000 per annum. The giver feels trapped into paying for the job done, and often coughs up to end the matter, whether happy or not.

    So what can be done to even up this one sided arrangement? Here are some suggestions.

    This advice is to the giver. Step 1. Think. Ask yourself, what is the problem? Step 2, if not familiar with construction techniques, talk to a friend who is, or look up as many leads as possible on DIY (Do it yourself) sites on the net and spend time looking at possibilities. Each problem has a good and bad way to overcome it. Price will vary accordingly. Here's an example. Let's begin by saying the house is a weatherboard, hasn't been touched in 15 years and paint has long since peeled off in patches. Timber weatherboards have turned grey and split. House is average in size, say 180 m2. These are obvious observations anyone can make. What should you do from here?

    If from research, you can establish what is good practice, write down a brief specification of work to be done, and get this document recognized in the tradesman's quote. This specification can be simple like,

    1. Clean all exterior walls, eaves, gutters, downpipes, fascias, door and window frames and all other previously painted surfaces.
    2. Prepare and repair surfaces, removing loose/flaking paint and fill all holes,splits and other defects with compliant filler. Reputty dried,cracked or missing putty to window glazing frames if window frames are timber timber. Ease and free windows after painting.
    3. Cut out any rotted timbers and replace, ensuring a tight fit, smooth and patch.
    4. To all new or exposed timber surfaces, apply one approved priming coat. Prime all surfaces.
    5. Rub down and smooth surfaces where necessary, and re-prime rubbed areas.
    6. Apply one undercoat, colour to match final coat colour where possible.
    7. Apply one finish coat in approved exterior grade oil or water based enamel, depending on existing paint and condition.
    8. Apply second finish coat in approved exterior grade enamel of selected colour.

    Then add a general clause like "the Builder/Contractor/Tradesperson performing this contract shall be registered, qualified and experienced in the field of work to be undertaken and comply with all relevant Council, State and Federal Government departments and relevant building Acts and Regulations. Obtain relevant Building permits and inspections of work in stages as and where required. The work shall be guaranteed free from defects for 3 years from the date of completion. The work shall be rectified to original standard should defects be identified"

    This way you have it in writing of what you expect the job outcome to be. If possible arrange for progress payments on completion of each paint stage (but never before completion of that stage). See if he/they will break down the quote into each stage, it may not be equal in cost depending on the work each stage requires. You should insist on this. Note, make sure you get his name and contact and signature on the quote, and witnessed if possible. Do all this before any work starts.

    Forking out $3000-$5,000 should not be readily made without your protection in place. It's only one page to be added to the quote, that will give you peace of mind. Look up the net for specification clauses that cover other trades like plumbers, electricians, carpenters etc. Finally, make sure you get a n invoice and receipt for payments you make. Take care that GST has been added and paid n the quote.

    Guess what, when a tradesman sees this attachment to his quote, the good ones won't bat an eyelid, the bad ones will vanish so fast you'll wonder where they came from. Good luck!
    JoJozep
    13th Dec 2019
    10:41am
    Let me add a short explanation to the above advice. I have assumed you want a good job that will see you out for at least ten years. Don't let the "doer" convince you you can save money by not doing this and that and the quote will be cheaper, of course it should be, but you have to decide what you want, or better still, what you need. If he does half the required work, then the quote should be less than half of a quote for the full work. Anymore and you're being ripped off. This is one of their little tricks.
    Tarabelle
    15th Dec 2019
    8:17am
    This is a particular issue for women....especially those of my vintage. BUT, the 2 biggest rip offs while renovating and landscaping my new property, were from so called reputable businesses. First was a gas heated which caused me breathing problems..rang the company but they said the emissions were within accepted levels. Finally rang manufacturer's technical dept and was told this model had been banned in other states. (Sadly he got into trouble for giving me this information). I did as he instructed and told the supplier/installer that I wanted it replaced with a vented model. They did so.........at a big cost, claiming they could only sell the other one as second hand so could not refund me in full. Second was gravel for covering/decorative mulch of front yard. I measured the whole surface, took a map with those measurements to the garden center. Asked them to check it over.....square mtr coverage agreed. Options I was given, and prices given, gave me the opportunity to select a beautiful stone instead of gravel. Was told I would need 1 truck load to cover the area. The minute the truck disgorged it's load in the driveway I knew it was going to go nowhere near covering the area, even spreading it as thinly as I could. But now it was there, partially done, and I had no choice but to order more, and more, until the area was covered.......1 truck at $800 turned into 4 trucks! I asked a gent to check my plan and measurements, he assured me I had all measurements correct, so the "problem" was not at my end. I had obviously been misquoted on the volume required. Had I known it would be 4 loads, I would have chosen stone of a lesser value to suit to budget I had set for this part of the project. If I can't trust businesses to do the right thing....how on earth am I going to trust anyone when I need help with work. I have requested a quotation to cut down some trees which are causing big problems......based on my experiences, I would not be doing this if the problems were minor.......but really have no choice........wish me luck...perhaps this time I will have nothing to be upset about.
    JoJozep
    15th Dec 2019
    4:59pm
    Tarabelle

    Yes you are right to say women are more prone to be ripped off. They are too assuming, thinking male labour hire or contractors will treat them with respect and honesty. Have you read the suggestions I made in my above article. This is what you did wrong in your gross mistreatment with the heater and yard layout.

    1. It doesn’t appear you got three separate quotes. (Competition will keep them on their toes)
    Note: Gas installations are controlled by regulation. If they have been banned in other states, there's every chance they are banned in the whole of Australia. I think they are lying to you. Your architect would have checked these guys out before committal.
    2. It doesn’t appear you specified the work. (Next time get them to agree in writing as to the scope of work and the quantities involved. Get them to sign and itemize the quote.
    3. Please read my modus operandi above, I am an architect with 50 years experience and only got ripped off once because I was too trusting, and didn’t do what I had done successfully over those years. This legal case is ongoing because of my laziness.

    Because I’m offering my advice for free, doesn’t mean the advice is poor or needn’t be followed. That’s everyone’s choice, but you came off second best and that saddens me.

    Remember too, these rip off merchants should have done a course in psychology as they can read your mind better than a psychologist and can detect when they can put one over you. They are masters at it. The only way to beat then is to sign a contract that specifies your rights and you have a course of action to take if they break the contract. In fact if they do and you advise them in writing they are in breach of contract, you don’t pay until the work is to standard and your satisfaction, period. If not, they have to drag you to court, and armed with a good spec/contract and quote, you’ll always beat them to a pulp, and they have to pay you damages, plus the cost to complete the work. So why wouldn’t you take 20 minutes to protect yourself? Better still, employ an architect (But get three quotes) to handle the matter for you and he/she becomes your agent under the contract. You will have peace of mind, and as he/she does the quotation, getting three quotes, writing a specification and formal contract, you let him/her do the worrying.

    I have defended my client in a huge battle that ensued because the original CEO didn't listen to our advice and insisted on a particular builder. When they gave him the flick, the new CEO was far more diligent and honest and with his help, we won a major court case, and saved the client close to $750,000. Why? because I had detailed every instruction, every variation, every delay, every cost discrepancy, literally, thousands of pages of precise documents. When the judge asked the Builder's Queen Counsel had he read them, he gasped and fell back, and couldn't speak for 5 minutes. So documentation, even for a small job, is most important.
    JoJozep
    15th Dec 2019
    5:04pm
    Mr. moderator, would you mind fixing a bug in your programme that trashes the apostrophe into some hieroglyphics not even an ancient Egyptian would understand. See JoJoZep's article above. Thanks! """""" (just testing)
    Blossom
    22nd Dec 2019
    8:37pm
    If the businesses are breaking the laws they should be named publicly, their licenses suspended and company vehicles seized and sold to help people they have "ripped off".
    Blossom
    22nd Dec 2019
    8:37pm
    If the businesses are breaking the laws they should be named publicly, their licenses suspended and company vehicles seized and sold to help people they have "ripped off".


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