Furniture retailer guilty of false or misleading advertising
Issue Date: - Tuesday, 28 October 2008
Allied Holdings WA Pty Ltd T/as Pine Discount Furniture
The company behind Pine Discount Furniture in Kenwick and O’Connor was today fined $18,000 in the Perth Magistrate’s Court for false or misleading advertising.
Consumer Protection charged Allied Holdings WA Pty Ltd for breaching the Fair Trading Act in relation to an advertisement published in The West Australian in June last year.
The company, through its director George Hatzikostis, made false or misleading representations about the recommended retail prices (RRP) of two items of furniture in the advertisement.
The court found that because the recommended retail prices of the Big Bar ($1999) and the Esplanade television unit ($799) were not recommended by any entity external to the company and were simply made up by Mr Hatzikostis, this amounted to false advertising.
Mr Hatzikostis had admitted in an interview with departmental investigators and during evidence in court that he had created the RRPs.
Under cross-examination he also said he understood that RRPs would normally be set by a distributor or wholesaler.
The court also found the advertisement gave consumers the false impression that they would save the difference between the RRP and the sale price if they purchased the products during the six-day ‘stocktake sale’ period. The products had never been sold by the company at the supposedly recommended price.
The Court was also told that the prices of the two items did not increase after the sale period ended on 20 June 2007.
The company was fined $18,000 and ordered to pay $4360 costs. In handing down today’s sentence, Magistrate Graeme Calder said Allied Holdings’ actions were meant to induce consumers to consider buying goods they may not otherwise have considered buying.
He agreed with Consumer Protection that the penalty needed to send a clear message to other traders that false or misleading advertising is not acceptable.
Consumer Protection Commissioner Anne Driscoll said advertisements and representations about price reductions must be correct.
“The community expects, and is entitled to, accurate information, to enable them to make informed purchasing choices,” she said.
“Consumers expect that advertised discounts on products are truthful as reliance on advertising forms part of the decision process when deciding to buy one set of goods over another.
“Traders who mislead or deceive consumers in WA will be investigated.”
ENDS
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