The Federal Court in Adelaide has fined Ascot Four, the former owner of Zamel’s, $380,000 for the false and misleading advertising in its Christmas 2005 catalogue.
Ascot Four distributed 2.6 million catalogues in SA, the ACT, Victoria, WA and Tasmania featuring false and misleading sales and strike-through prices for 11 jewellery items î º eg, a 10.5mm bolt ring bracelet at a price of $745 was pictured with a strike-through price of $1675.
Following an investigation by the ACCC, the Commonwealth Director of Public Prosecutions laid charges against the jewellery retailer on 20 December 2006.
On 21 August 2008, the Federal Court found that Ascot Four had breached section 75AZC(1)(g) of the Trade Practices Act 1974 by falsely representing that it had sold each of the 11 items at the strike-through price within a reasonable time prior to the sale period. The company was also found to have falsely represented that the purchase of each of the 11 items during the sale period would result in a saving to the consumer of the difference between the sale price and the strike-through price.
ACCC chairman Graeme Samuel said: “The ($380,000) 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.
“The ACCC offers guidance on its website for retailers who choose to use comparison or two-price advertising. The message is clear î º 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 on February 27.
* Ascot Four is no longer the owner of 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. The court’s order does not relate to the current operator of Zamel’s jewellery stores.