An Auckland leather furniture company has been fined a total of $36,000 over misleading claims about the 'sale' price of furniture.

In the Auckland District Court today, 230 Marua Limited was found guilty on six charges of breaching the Fair Trading Act by:

  • Advertising furniture as being 'on sale' when the price was the same before, during, and after the 'sale'; and
  • Claiming that leather lounge suites on sale for $3,000 were sold by other retailers for $6,000 when this was not correct.

Commerce Commission Director of Fair Trading Deborah Battell said that any claims about so-called 'sale' prices must be accurate.

"If you advertise a sale, you have to offer genuine sale prices - that is, cheaper prices for a limited time," says Ms Battell.

"In this case the price was the same before, during, and after the so-called sale."

Ms Battell says that comparisons about the prices charged 'elsewhere' must be accurate.

"Companies must make sure they are comparing 'apples with apples'" says Ms Battell.

In this case, 230 Marua company director Naresh Shukla had shown customers copies of leather lounge suites advertised by other retailers including Harvey Norman, Farmers and Danske Mobler, comparing his prices with theirs.

"Mr Shukla claimed that customers would pay $6,000 elsewhere for a leather lounge suite that only cost $3,000 at 230 Marua, but the Commission found that the more expensive leather lounge suites sold by other retailers were better quality."

"By making this comparison, the company was clearly intending to gain a competitive edge over other companies," says Ms Battell.

"Comparing prices and shopping around for the best deal is at the heart of competition," says Ms Battell.

"Misleading comparisons not only harm customers, they undermine the competitive process."

Background

In June 2006, clothing and outdoors retailer Kathmandu was fined $28,000 for misleading claims in relation to 'sale" items.