Discount rug advertising legal action settled
Issue Date: - Thursday, 13 November 2008
Rugs a Million
Proceedings in the Supreme Court against rug retailer Rugs a Million and various individuals have arrived at a satisfactory out of court settlement with the Commissioner for Consumer Protection agreeing to settle the proceedings.
The retailer’s high profile television advertisements claiming large discounts and numerous occasions when rugs were supposedly on sale first came to the attention of Consumer Protection in 2003.
The Commissioner commenced the Supreme Court litigation in 2005 seeking declarations that Rugs a Million had breached the Fair Trading Act 1987 and injunctions restraining further breaches. Preliminary court proceedings led to Rugs a Million voluntarily giving undertakings to the Commissioner not to engage in the conduct.
The parties have now reached a settlement that involves Rugs a Million consenting to the Supreme Court making declarations that they engaged in misleading or deceptive conduct that breached the Fair Trading Act 1987. The orders will also involve the Court granting injunctions restraining the companies from engaging in similar conduct.
The conduct complained of related to dual price ticketing of rugs that represented large percentage discounts on rugs that were not a genuine price reduction or saving for consumers. Rugs a Million also ran sales that continued past their advertised finishing dates.
The settlement also involves the Commissioner discontinuing some claims, including those made against individual persons involved in running the companies.
“Consumers must be confident that the claims they see in advertisements, especially with the far-reaching and high profile nature of TV advertising, are accurate and not misleading. I am particularly pleased that the company has acknowledged that some of its advertisements were misleading and that it is has substantially changed its method and style of advertising.” Commissioner Anne Driscoll said.
Consumer Protection will continue to apply a focus on advertising of products and services in Western Australia to ensure that consumers get a fair deal and are not mislead.
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