Another retailer makes misleading furniture claims: Hazelwoods fined $15,000
Published11 Apr 2000
Fines against companies associated with the North South Furnishings Group Limited now total $23,000 after the Upper Hutt District Court today fined Hazelwoods Home Traders Limited $15,000 for breaching the Fair Trading Act by making false or misleading claims about furniture.
The Commerce Commission prosecuted Hazelwoods, which pleaded guilty.
Two weeks ago a Napier-based member of North South, Furniture Now Limited, was fined $8,000 for making false and misleading claims about furniture.
Commission Chair John Belgrave said that the Commission has major concerns about furniture retailers not complying with the Act and plans more enforcement action in this industry.
In this case Hazelwoods did not provide all the items of furniture offered in a "fantastic start up package deal" featured on the front page of its June/July 1999 catalogue. It also described pine furniture with a rimu-coloured vinyl finish as "solid rimu".
In December 1998 Hazelwoods had entered a settlement with the Commission. In the settlement the Commission alleged that Hazelwoods offered package deals, but did not provide all the items featured, and falsely claimed that furniture was solid wood when it was not. Hazelwoods gave signed undertakings to ensure that its future advertising would correctly and clearly state the characteristics of all goods advertised.
Hazelwoods told the Commission that a printing error led to the mistake in the advertisement for the "fantastic start up package deal". Hazelwood's general manager saw the mistake 10 days before the catalogue was distributed but made no attempt to correct the catalogue or stop its distribution. He was concerned about the costs of this.
The general manager did, however, ask his staff to put up an apology sign in the company's stores, publish an apology in the local community paper and have a letter sent to 2,000 customers.
Mr Belgrave said that with 80,000 copies of the catalogue distributed, 10 days in which to correct it and a previous warning for similar behaviour, Hazelwood's response was inadequate.
"Unfortunately, the charges against Hazelwoods are typical of what the Commission sees as the problems in the retail furniture industry," Mr Belgrave said.
"Furniture is a big portion of household spending. False or misleading claims by furniture retailers can cause harm to consumers as well as honest retailers who miss out on business unfairly drawn away from them.
"Last year we had many meetings with retailers and the Retail Merchants Association to explain the law and to help draft advertising guidelines specifically for furniture retailers. The Association was highly co-operative and put a lot of its own time into educating its members.
"We followed up with settlements with retailers who were at risk of breaking the law. Now we are taking prosecutions because, disappointingly, some retailers have not complied."
The most common Fair Trading Act issues among furniture retailers are:
false claims about the composition of furniture
not providing the goods advertised
false or misleading claims about prices, including claimed "interest free" deals that are not genuinely interest free, and
