Aussie furniture giants hit with hefty fines over ‘misleading sale price’ claims

Four major furniture retailers were hit with penalties. Source: Getty. (Stock image).

Seeing a huge price slash on an expensive couch can make it very tempting to shell out on something new. But an alarming new report from the ACCC has now claimed four well-known furniture chains may have misled the public with false ‘was/now’ price claims.

Retailers Plush – Think Sofas Pty Ltd (Plush), Koala & Tree Pty Ltd (Koala Living), ESR Group Holdings Pty Ltd (Early Settler), and Oz Design Furniture Pty Ltd have all been hit with hefty fines after being issued with infringement notices. The consumer watchdog has claimed they allegedly made “false or misleading representations” by claiming customers could save money if they purchased certain furniture items – when it wasn’t always the case.

Each of the furniture giants has now paid the $12,600 penalty, the ACCC confirmed. Giving examples of the claims, the watchdog said some used advertising statements such as “was $2599, now $2049”, or “$799, save $200”, when the item had never been advertised at the “was” price, or was only advertised at that price for a short period of time.

In one case, one retailer advertised a Roller Ottoman at $539 with the words “save $360”, despite it being available for $449 right before the sale. Meanwhile, another advertised a chair with the words “$799, save $200″, when its price for the six months before was $699.

“Consumers rely on comparative pricing to find the best deal available. If there are no genuine savings, businesses are misleading consumers,” ACCC Commissioner Sarah Court said. “Using claims of false savings to induce consumers to purchase products also disadvantages competing retailers which are complying with the law.”

“The ACCC has taken this enforcement action to send a strong message to retailers that they must ensure that any claimed savings are accurate and based on a ‘before’ price which has been offered for a reasonable period when using comparison advertising.”

It’s not the first time a major retailer has been accused of misleading customers. Just months ago low-fare carrier Jetstar was forced to pay a whopping $1.95 million in penalties for misleading customers over their right to a refund.

In a ruling delivered in May, the Federal Court found that between April 2017 and March 2018 Jetstar Airways made false or misleading representations on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare. According to the Australian Consumer Law (ACL), if a flight is cancelled or significantly delayed, passengers may be entitled to a refund. This gives consumers a right to a remedy if services aren’t supplied within a reasonable time.

The court found that the airline’s terms and conditions on its website breached the ACL by claiming that consumer guarantee rights under the ACL did not apply to Jetstar’s inflight services – and that the airline’s liability in providing remedies to consumers was limited.

The ACCC took legal action against Jetstar in December 2018. At the time, the airline admitted to its wrongdoings and the ACCC and Jetstar came to an agreement that the airline should pay a $1.95 million penalty, and contribute to the ACCC’s costs.

“Jetstar’s representations were false or misleading because all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare,” ACCC Chair Rod Sims explained. “If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees. All consumers have the right to a remedy, such as a refund, if services are not supplied within a reasonable time.

“This decision is a warning to all businesses that misleading consumers about their rights breaches the Australian Consumer Law, and doing so may result in multi-million dollar penalties.”

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