The Federal Court has found The Jewellery Group Pty Ltd, the company which operates the Zamel’s jewellery chain, guilty of misleading consumers about “savings” during its sales.
According to the Court, Zamel’s misrepresented the savings consumers would make by purchasing 44 jewellery ‘sale’ items advertised in Zamel’s catalogues and a flyer as well as on its website and in-store between November 2008 and May 2010.
The Court found that statements such as ‘$99 $49.50′ and ‘Was $275 Now $149′ by Zamel’s misled consumers into believing that they would save the difference between the higher and lower prices if they purchased the items during the sale period.
However this was not the case as Zamel’s had either not sold the items at the higher price, or had rarely sold them at the higher price, in the four-month period immediately prior to the start of the sale.
In his judgment on Thursday, Justice Bruce Lander said that because the company pursued a vigorous discounting policy outside of sale periods, the 44 items advertised were rarely sold at the strike-through price with “almost all consumers” paying a lower price.
“The savings representation was false and thereby the respondent engaged in conduct that was misleading or deceptive or, at least, likely to be misleading or deceptive.”
Australian Competition and Consumer Commission chairman Rod Sims concluded that the Court’s decision sends a clear message to all retailers.
“It is unlawful to use this kind of advertising and represent that consumers would make savings during a sale when the savings claimed are not real,” he said.
“The previous criminal prosecution of the former operator of the Zamel’s business concerned circumstances where there had been no sales of items at the higher price in the period before the catalogue sale.
“The court’s decision today has extended this area of the law for the benefit of consumers by making it clear that retailers must not represent savings to be made by consumers during sale periods by the use of two price advertising when they have not sold, or rarely sold, items at the higher price.”
The Federal Court has found The Jewellery Group Pty Ltd, the company which operates Zamel’s jewellery stores, guilty of misleading consumers about savings that could be made during its sales.
According to the Court, Zamel’s misrepresented the savings consumers would make by purchasing 44 jewellery items advertised in Zamel’s catalogues and a flyer as well as on Zamel’s website and in-store between November 2008 and May 2010.
The court found that, by using statements such as “$99 $49.50″ or “Was $275 Now $149″, Zamel’s misled consumers into believing that they would save the difference between the higher and lower prices if they purchased the items during the sale period. However this was not the case as Zame had either not sold the items at the higher price, or had rarely sold them at the higher price, in the four-month period immediately prior to the commencement of the sale.
In his judgment in Adelaide on Thursday, Justice Bruce Lander said that because the company pursued a vigorous discounting policy outside of sale periods, the 44 items advertised were rarely sold at the strike-through price with “almost all consumers” paying a lower price.
“The savings representation was false and thereby the respondent engaged in conduct that was misleading or deceptive or, at least, likely to be misleading or deceptive.
Australian Competition and Consumer Commission chairman Rod Sims said the Courts decision sends a clear message to all retailers.
“It is unlawful to use this kind of advertising and represent that consumers would make savings during a sale when the savings claimed are not real,” Sims said.
The previous criminal prosecution of the former operator of the Zamel’s business concerned circumstances where there had been no sales of items at the higher price in the period before the catalogue sale.
