The ACCC alleges that Taxsmart made false representations in a number of job advertisements aimed at accounting graduates which were posted on the recruitment website Seek.
According to ACCC deputy chairman Dr Michael Schaper, some of the 18 graduates who took up the job offer outlaid between $45,000 and $80,000 in order to become registered as a tax agent and subsequently become a Taxsmart franchisee – only to have their employment terminated within the first four to seven months.
Because they had been made redundant, the graduates could no longer meet the requirements of the tax agent registration, which includes 12 months of supervised experience.
“They were therefore unable to exercise the option to take up the Taxsmart franchise because they weren’t qualified tax agents. They were caught in a Catch 22,” said Dr Schaper.
According to the ACCC, Taxsmart falsely represented that its graduate program would satisfy the legal requirements for registration as a tax agent; that graduates would be employed for a period of 12 months; that graduates would receive one-on-one mentoring and supervision from a registered tax agent; that Taxsmart had established offices in the cities in which employment positions were advertised; and that at least 50 per cent of the clients in Taxsmart’s relevant offices were business clients.
Most of the 18 graduates who took up the offer came from a non-English-speaking background, said Dr Schaper. Eight of the graduates took their complaint directly to the ACCC, he added.
The ACCC is seeking penalties against Taxsmart Group Pty Ltd for contravening Australian Consumer Law in the Melbourne Federal Court, with the first scheduling conference set for 12 August 2013.
The commission is seeking pecuniary penalties against Taxsmart, as well as a disqualification order (from acting as the director of a company) against Taxsmart chief executive Scott Andrews.
The ACCC is also seeking full compensation for the graduates.
