Kleins fined $6,000 for making false claims about sale prices
Published16 Feb 1996
Kleins New Zealand Ltd, which runs an extensive chain of jewellery stores, was found guilty and fined $6,000 today in the Auckland District Court on three charges of making false claims in a sale promotion.
The Commerce Commission prosecuted Kleins after almost 240,000 copies of an advertising flier including false claims about prices were distributed in October 1994. The Fair Trading Act prohibits false or misleading representations about prices.
Commission Chairman Dr Alan Bollard said the flier included photographs of jewellery and watches advertised as on sale at stated prices. But most of the items in the photographs were not available at those prices.
In one photograph, of a range of gift boxed jewellery, none of the items were on sale at the advertised price of $4.45. The sale price for these items was in fact $13.45 and $44.95.
In another photo only four of the eight watches were available at the stated price.
In the third photo 17 of the 20 earrings and necklets were on sale at prices in excess of the sale price shown in the brochure of $3.45.
Judge Boshier imposed fines of $2,000 on each of the above charges (total penalty of $6,000) together with Court costs and Commission costs (yet to be determined). The Judge considered that the advertisement was designed to make an instant impression on the reader. The Judge accepted that the first impression would entice the reader into the shop where he or she may be tempted to buy goods that they had not gone there to buy.
Dr Bollard said this was a case of a company with an almost nation-wide chain making misleading claims in widespread advertising that reached a significant number of people.
