The Federal Court in Adelaide has fined Ascot Four Pty Ltd, the former owner of the jewellery retailer Zamel’s*, $380,000 after it was found guilty of making false and misleading representations about the price of 11 jewellery items advertised in its Christmas 2005 catalogue.
Following an investigation by the Australian Competition and Consumer Commission, the Commonwealth Director of Public Prosecutions laid charges against the jewellery retailer on 20 December 2006.
On 21 August 2008, Ascot Four was found to have falsely represented that the purchase of each of the 11 items during the sale period would have resulted in a saving of the difference between the sale price and the strike through price in breach of section 75AZC(1)(g) of the Trade Practices Act 1974, which prohibits false or misleading representations being made in relation to the price of goods.
In handing down the fine, Justice Mansfield stated: "The object of the Trade Practices Act is 'to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection'. The defendant's conduct…was both serious and inconsistent with that object.
"The penalty reflects the gravity of the conduct and signals to the jewellery industry, and to retailers generally, that false representations in relation to the price of goods will not be tolerated", ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC offers guidance on its website for retailers who choose to use comparison or two-price advertising. The message is clear - advertised discounts must be real and not illusory."
In addition to the fine, the Federal Court has ordered Ascot Four to pay the ACCC's costs.
Ascot Four has lodged an appeal, which will be heard in the Federal Court, Adelaide on 27 February 2009.
*During the period of the conduct, around July 2005 to early 2006, the defendant was the proprietor of a jewellery retailer business trading under the name Zamel’s. In March 2007, the business interests of Zamel's were sold to an unrelated entity, which continues to trade under the name Zamel's.