Zamels loses Appeal

The Full Court of the Federal Court has unanimously dismissed an appeal made by Ascot Four, the former owners of the Zamel's jewellery chain, against…
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The Full Court of the Federal Court has unanimously dismissed an appeal made by Ascot Four, the former owners of the Zamel’s jewellery chain, against 11 charges of false and misleading advertising.
 
Announcing the decision Justice Mansfield said the company’s advertising of 11 items in its Christmas 2005 catalogue were found to be false and misleading “because no consumer ever paid the strike through price (or anything close to it) before the sale period”.
 
Ascot Four distributed 2.6 million catalogues in SA, the ACT, Victoria, WA and Tasmania featuring the false and misleading sales and strike-through prices in the lead-up to Christmas 2005 – eg, a 10.5mm bolt ring bracelet at a price of $745 was pictured with a strike-through price of $1675.
 
Following an investigation by the ACCC, the Commonwealth Director of Public Prosecutions laid charges against the jewellery retailer on 20 December 2006.
 
On 21 August 2008, the Federal Court found that Ascot Four had breached the Trade Practices Act by falsely representing that it had sold each of the 11 items at the strike-through price within a reasonable time prior to the sale period.
 
The company was also found to have falsely represented that the purchase of each of the 11 items during the sale period would result in a saving to the consumer of the difference between the sale price and the strike-through price.
 
In January this year the Federal Court ordered that a conviction be recorded on each of the 11 charges against Ascot Four and that it pay a penalty of $380,000.
 
ACCC chairman Graeme Samuel said the Full Court’s judgment reinforces its message to retailers who use two-price advertising that the represented savings must be legitimate.
 
“The ACCC seeks truth in advertising and consumers have every right to expect it,” he said.
 
 

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