The Australian Competition and Consumer Commission has begun proceedings against Prouds Jewellers Pty Limited for making "Was/Now" price comparisons that were allegedly false or misleading in contravention of sections 52 and 53(e) of the Trade Practices Act 1974.
From at least December 2005 to date, Prouds has promoted discounts on its jewellery in catalogues by making statements such as "Was $199 / Now $99.50".
In 2005, the ACCC worked with the jewellery industry in preparing and promoting ACCC guidelines on jewellery advertising practices to promote fair trading in Australia's $2.5 billion jewellery industry. This year the ACCC and other Fair Trading Operations Advisory Committee members monitored comparative price jewellery advertising in the lead up to Mother's Day.
As part of this broader FTOAC investigation, the ACCC investigated the bona fides of Prouds' "Was/Now" pricing of 17 items appearing in both its February 2006 Summer of Love catalogue and its May 2006 Love You Mum catalogue.
The ACCC alleges that the "Was/Now" comparisons made by Prouds for these 17 items were false or misleading.
The ACCC contends that by making "Was/Now" comparisons, Prouds represented its customers would save the difference between the Was and Now price compared to customers who purchased the items before the catalogue promotions. The ACCC alleges that this was not the case as Prouds usually sold the items for less than the Was price, either during other promotions or in the usual course of its business.
The ACCC is seeking injunctions to prevent Prouds from using comparative advertising except in limited circumstances where the promoted saving is genuine. The ACCC is also seeking, declarations, corrective advertising, costs and orders for Prouds to implement a trade practices law compliance program.
A directions hearing has been set down for 8.45 a.m. on Thursday 14 December 2006 in the Federal Court, Sydney.