Forty Winks Franchising Pty Ltd - s.87B undertaking

In or about May 2005, Forty Winks published and distributed its "Celebration Sale" catalogue throughout Australia. The cover page of the catalogue contained the statement "Save up to $1000", and the remaining pages quoted a number of "$ savings" on bedding and furniture which the ACCC believes conveys the representation to consumers that the savings were calculated from the price at which Forty Winks usually sold those products.

The back page of the catalogue contained a very fine print disclaimer which stated:

"Savings shown in the catalogue are off the normal ticketed prices. Forty Winks stores usually sell their products at less than the ticketed prices because we want to give our customers the best and most competitive prices we can. Accordingly, the comparisons to ticketed prices given in this catalogue are an indication of the maximum price from which savings are calculated, not necessarily the usual selling price of the product..."

The ACCC considers Forty Winks' "Save up to $1000" statement and its quoted savings throughout the catalogue:

• may be misleading and deceptive and contravene section 52 of the TPA; and
• may falsely represent the prices and/or price savings of its furniture and contravene section 53(e) of the TPA.

By using the statement and quoting the savings specified in the catalogue, Forty Winks may have overstated the actual savings offered to consumers in the catalogue.

The ACCC also considers the use of the fine print disclaimer on the back page of the catalogue may not be sufficient to correct the misleading representations in the body of the catalogue.

Forty Winks will only advertise price reductions such as ("save up to $xx", "$xx off" or "xx% off") for products calculated by reference to the usual selling prices for those products at Forty Winks stores unless a clear and prominent explanation specifies the alternative price reference point used for the advertised price reduction.

Forty Winks will establish, implement and maintain a system of record keeping sufficient to substantiate any claims that products have been sold or ticketed at Forty Winks stores at particular prices.

Upon a request from the ACCC, Forty Winks will permit a representative/s of the ACCC to inspect the records maintained pursuant to paragraph 9 of these undertakings or provide the ACCC with copies of such records.

Forty Winks will establish, implement and maintain a system for internal approvals of all Forty Winks advertisements.

Annually, upon the anniversary of the commencement of these undertakings, the Chairman of the Forty Winks Group must certify to the ACCC in writing that Forty Winks has complied with these undertakings.

Forty Winks will establish, implement and maintain a trade practices compliance program covering Parts IV and V of the TPA.

Forty Winks will maintain and continue to implement the trade practices compliance program for a period of three years from the commencement of the undertaking.