Parallel Imported pays the cost for misleading prices
18 July 2008
A store selling parallel imported goods has pleaded guilty to breaching the Fair Trading Act and was yesterday fined $15,000 in the Auckland District Court.
A Commerce Commission investigation into Parallel Imported Limited found that between April 2005 and November 2006 customers making enquiries about the prices of goods were quoted higher prices in store and on the phone than the prices for the same goods promoted in newspaper advertising and on Parallel Imported's website. The misleading advertised prices were applied to a range of goods that Parallel Imported sells, including car audio equipment, cameras and perfumes.
"Many consumers research the price of goods before they commit to making a purchase. Consumers are entitled to expect that the price advertised in newspapers and online is the price that they will pay for goods in-store," said Commerce Commission Chair, Paula Rebstock.
"The onus is on businesses to ensure that their products are available at the advertised prices. Businesses must ensure that they have effective systems in place so that price representations are consistent across all channels, including websites, print advertising, in-store advertising and oral representations," said Ms Rebstock.
"It is important that businesses provide accurate information so consumers can make informed choices about purchasing decisions. Inaccurate information not only harms consumers but it also harms other businesses, as misleading price representations may take business away from those who are advertising correctly."
Parallel Imported had previously been warned by the Commission about inaccurate pricing.
Ms Rebstock said, "When a business has been previously warned by the Commission about practices that are at risk of breaching the Fair Trading Act we expect them to put an adequate compliance programme in place. If they don't and there are further potential breaches the Commission will take action through the courts."
The Fair Trading Act
Section 13(g) of the FTA states:
"No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services,
(g) Make a false or misleading representation with respect to the price of any goods or services
Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.
Parallel Imported Limited is a major importer and retailer of parallel imported goods. It is a relatively high profile print advertiser, advertising regularly in publications such as The New Zealand Herald, The Dominion Post, The Christchurch Press, and other local newspapers. It currently operates four outlets in Auckland. An outlet in Wellington closed in 2007.