The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Lisat Holdings Pty Ltd, trading as Rubelli Designs, about its two-price advertising.
Rubelli currently operates leather lounge suite retail outlets in Queensland, New South Wales and the ACT.
From at least January 2007 to March 2008, Rubelli regularly advertised in brochures, newspaper advertisements and on its website, using comparative price representations (e.g. 'Was $3790 Now $2799' and 'RRP $3799 Now $2499').
The ACCC was concerned that consumers were being misled and deceived by such representations and that Rubelli was contravening section 52 of the Trade Practices Act 1974.
Rubelli conceded that the advertised items had either not been previously offered for sale at the 'Was' price or 'RRP', or had not been offered for sale at the 'Was' price or RRP for a reasonable period of time prior to the advertisements. Rubelli acknowledges that its use of comparative pricing was inappropriate.
The ACCC has accepted court enforceable undertakings from Rubelli that it will:
- refrain from using comparative price advertising of goods by referring to specific 'Was' or 'RRP' prices for goods where those goods have not been previously offered for sale by the company for a reasonable period of time immediately prior to the period of the commencement of the discount
- ensure that all future advertising and other forms of promotion comply with the consumer protection provisions of the Trade Practices Act
- establish and implement a trade practices law compliance program, and
- arrange for an information notice to be displayed in all stores.
"Consumers have a right to accurate information when making purchase decisions," ACCC Chairman, Mr Graeme Samuel, said today. "There is huge potential for consumers to be misled when companies advertise in this way. When buying high value items such as furniture, the gravity of the misconception can have a severe impact on household budgets.
"This is not the first furniture retailer the ACCC has found to be incorrectly using two-price representations. Retailers must be vigilant to advertise in accordance with the law, despite what may appear to be accepted behaviour within an industry. We will not tolerate businesses using false or misleading price comparisons which dupe consumers, whether it is intentional or not."
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