Zamel’s fined $250,000 for misleading advertising

Five months after finding Zamel's guilty of misleading consumers about 'savings' during its sales, the Federal Court has fined the retail chain's former owner, The…
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Five months after finding Zamel’s guilty of misleading consumers about “savings” during its sales, the Federal Court has fined the retail chain’s former owner, The Jewellery Group, $250,000.
On August 16 Justice Bruce Lander found that Zamel’s misrepresented the savings consumers would make by purchasing 44 jewellery ‘sale’ items advertised in its catalogues and a flyer as well as on its website and in-store between November 2008 and May 2010.
He 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 when 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.
Justice Lander said the $250,000 penalty reflected the seriousness of the conduct and the need to deter other retailers from engaging in similar conduct.
“Zamel’s should be deterred from engaging in any further conduct of this kind. Moreover, the penalty must be sufficient to deter any like-minded retailer from engaging in the same conduct.”
ACCC Chairman Rod Sims said the penalty was a clear message to businesses that the court takes a dim view of this sort of conduct.
“The ACCC has taken steps to ensure consumers are not misled as to savings they may make when retailers advertise goods. In this very competitive market, consumers are vulnerable to false and misleading tactics and the penalty imposed by the court should serve as a stern warning to other retailers,” he said.
Justice Lander also ordered Zamel’s to publish corrective notices in newspapers and on its website, implement a trade practices compliance program and pay the ACCC’s costs.
Zamel’s conduct was found to be in breach of sections 52 of the Trade Practices Act 1974, which prohibits conduct that is misleading or deceptive or likely to mislead or deceive.
Zamel’s also contravened section 53(e) of the Trade Practices Act 1974, which prohibits making false or misleading representations with respect to the price of goods or services.
In an official statement released after the Federal Court’s latest finding, The Jewellery Group said it would appeal the decision which “has significant implications for all of retail in Australia”.
“Zamel’s has at all times acted in a way that it believed was compliant with its legal obligations, and consistent with widespread industry practice,” the statement said.
“Zamel’s has always sought to bring the best value to consumers and market its value proposition in accordance with the law.”