Hearing aid retailers fined for misleading vulnerable pensioners with false advertising

FALSE ADVERTISING: ACCC takes two Australian hearing aid companies to task for misleading elderly consumers.
FALSE ADVERTISING: ACCC takes two Australian hearing aid companies to task for misleading elderly consumers.

TWO of Australia’s leading hearing aid retailers made false claims in advertisements targeted at pensioners according to the Australian Competition and Consumer Commission.

The hearing aids were supplied under the government’s Hearing Services Program which provides subsidised hearing services and devices to eligible people such as pension concession card holders, veterans and defence force personnel.

The consumer watchdog has taken legal action against Oticon Australia Pty Ltd and Sonic Innovations Pty Ltd.

The advertisements were published on 85 occasions in newspapers around Australia from June to November 2017 under the AudioClinic and HearingLife brands.  

Oticon and Sonic sold more than 10,000 of the advertised Oticon Ria2 and Sonic Cheer20 hearing aids.

The companies face penalties totaling $2.5 million.

The retailers have admitted they made the false and misleading representations in the AudioClinic and HearingLife advertisements and have agreed to consent orders in the Federal Court, including declarations that they have contravened  Australian Consumer Law.

Oticon and Sonic have also committed to offer refunds to customers who purchased additional equipment to use with the advertised hearing aids.

The Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate.

The advertisements claimed pensioners had to book a free hearing test at a AudioClinic or HearingLife hearing clinic before the deadline in the advertisement, in order to receive a free hearing aid, when in fact there is no deadline to obtain a fully-subsidised hearing aid under the Hearing Program.

They said the free hearing aids included wireless technology that would allow users to connect them to digital devices like televisions and mobile phones, when the technology was not included with the free hearing aid, but instead required additional accessories which were sold separately at an extra cost.

The advertisements also said any user of the advertised hearing aid would no longer miss any conversations, when in fact this depended on a person’s individual circumstances and the nature of his or her hearing impairment.

“Hearing aid advertisements have a powerful effect on purchasing decisions. The ads must be accurate and truthful, especially given that many of the people buying hearing aids may be vulnerable due to their age,” ACCC Commissioner Sarah Court said.

“The AudioClinic and HearingLife advertisements were targeted at pensioners. Consumers who receive hearing aids under the Hearing Program are, on average, aged in their late seventies.”

“This action is part of our broader work to address some concerning practices in the industry after we first put hearing clinics on notice about our concerns in 2017.

“We encourage consumers to shop around for the best deal, compare offers, and choose a hearing aid that is right for their needs. We expect to make a further announcement about enforcement action against another hearing clinic shortly,” Ms Court said.

Oticon and Sonic are owned and operated by William Demant Holdings which operates more than 200 hearing clinics across Australia, including the AudioClinic, HearingLife, Western Hearing Services, and Adelaide Digital Hearing Solutions brands.

On March 3, 2017, the ACCC released a report Issues around the sale of hearing aids to encourage the industry to reconsider commissions, disclosure and sales practices in the context of the Australian Consumer Law.

Around 80 per cent of hearing aids supplied in Australia are provided under the Hearing Services Program which is administered by the Department of Health.

Around 300 providers, including Oticon and Sonic, are accredited by the Department of Health to provide hearing devices to voucher holders under the Hearing Program. Vouchers can be used to obtain fully-subsidised hearing devices, or to cover some of the cost of partially-subsided hearing devices, with the consumer paying the remainder of the cost directly to hearing clinics.

For further information:  1300 302 502,  www.accc.gov.a