The operators of the Designer Brand Outlet website, Mr Ben Kloosterman and Ms Lucy Shi, have reached a compensation settlement with the Australian Competition and Consumer Commission for the benefit of consumers.
On 11 December 2008, the Federal Court found that Mr Kloosterman and Ms Shi had made false, misleading and deceptive representations on the website www.designerbrandoutlet.com.
This included claims that items of genuine designer label women's clothing were for sale when either no items were supplied at all or were counterfeit.
To get redress for affected consumers, the ACCC filed a notice of motion seeking compensation, including affidavits from consumers. This claim has now been settled.
As part of that settlement, Mr Kloosterman and Ms Shi have paid money to the ACCC for consumer refunds. Only consumers who provided the ACCC with an admissible affidavit for the proceedings are eligible and they will be contacted shortly.
Many of the consumers worldwide affected by this conduct told the ACCC they felt confident ordering items from www.designerbrandoutlet.com because it claimed to be an Australian-based business. ACCC inquiries revealed that Mr Kloosterman and Ms Shi actually lived in China.
"This outcome sends a strong message to online businesses that no matter where you are, if you mislead consumers, the ACCC can still take action," ACCC Chairman, Mr Graeme Samuel, said today.
This matter was initially brought to the ACCC's attention by the US Federal Trade Commission as a result of complaints received through the eConsumer.Gov website, an initiative of the International Consumer Protection Enforcement Network (ICPEN).
The ACCC then became aware that many consumers had complained on various online forums about their bad experiences with the Designer Brand Outlet business.
"I would urge consumers who have been misled by any business not only to post their complaint on an online forum but importantly to also contact the ACCC and make a complaint on 1300 302 502," Mr Samuel said.