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ACCC Sends 'Strong Message' To Furniture Retailers, Fining Them Thousands Over Misleading Sales

Four furniture retailers have been hit with fines from the consumer watchdog over misleading 'was/now’ price comparisons in sales advertising.

Plush, Koala Living, Early Settler and Oz Design Furniture each paid a penalty of $12,600 to the Australian Competition and Consumer Commission (ACCC).

On Friday the ACCC said it had "reasonable grounds to believe each retailer had made false or misleading representations" when it came to advertising items as discounted or on sale.

The consumer watchdog said the retailers led customers to believe they would save money if they purchased certain furniture items, however, this was not the case.

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For example, one of the retailers advertised a ‘Roller Ottoman’ for  $539 with the words ‘save $360’, even though it was available for $449 immediately before the sale. This suggests the pre-sale price was $899 rather than the truth, which was $449.

One of the other furniture stores advertised an occasional chair with the words ‘$799, save $200’. However, its usual price for a period of six months prior to the so-called sale was $699. This is actually $100 cheaper than the sale price.

“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.

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The retailers also used advertising statements such as ‘was $2599, now $2049’, or ‘$799, save $200’, when the furniture item had never been advertised at the ‘was’ price, or was only advertised at the ‘was’ price for a short period of time.

“Using claims of false savings to induce consumers to purchase products also disadvantages competing retailers which are complying with the law,” Court said.

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Under Australian Consumer Law, the ACCC can issue an infringement notice where it has reasonable grounds to believe a person or a business has contravened certain consumer protection laws.

“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,” Court said.

A spokesperson for Early Settler told 10 daily they have rectified ACCC's price concerns and the watchdog is now satisfied.

"Early Settler has used the experience to further strengthen our compliance systems and is confident in our compliance systems moving forward to ensure our customers can have complete confidence in our advertising claims," the spokesperson said.

Plush, Koala Living, and Oz Design Furniture have also been contacted by 10 daily for comment.

Contact the author alttouf@networkten.com.au