Federal Court fines Aussie motor repair giant $2.6m

MOTOR repair giant Ultra Tune has been fined $2.6m after it was found to have breached franchising and consumer laws.

The Federal Court imposed the record $2,604,000 penalty after Justice Bromwich found the company had made false or misleading representations to a prospective franchisee and breached the Australian Consumer Law and Franchising Code of Conduct.

It is the first time the Australian Competition and Consumer Commission has brought against a franchisor alleging a breach of the Franchising Code obligation to act in "good faith" when dealing with franchisees.

In their findings, the Court found that Ultra Tune had mislead a franchisee about the ongoing rent of the premises and the age and price of the franchise.

They also told the franchisee a $33,000 deposit was refundable, when it wasn't.

Ultra Tune.
Ultra Tune.

Ultra Tune also failed to prepare marketing fund statements within required time frames, failed to provide audit reports to franchisees and attempted to mislead the Court by using documents purportedly sent to the prospective franchisee.

"There must be no tolerance for manufacturing evidence to deceive a regulator, and even less when the deception is maintained in this Court," Justice Bromwich said.

Ultra Tune have also been ordered to pay the franchisee the full deposit back, plus interest.