This media release has been edited on 18 March 2011 changing the description of Spazia Casa from 'bathroom and kitchen supplier' to 'bathroom and flooring supplier'.

Bathroom and flooring supplier Spazio Casa Limited has entered into a settlement with the Commerce Commission following multiple breaches of the Fair Trading Act.

The Commission's investigation established that between late 2007 and April 2010:

  • Spazio Casa made a number of false and misleading representations on its website and in brochures regarding the country of origin of a number of the products it supplied. Despite approximately 60 per cent of its products being manufactured in China, Spazio Casa gave consumers the impression that its products were made in Italy.
  • Spazio Casa claimed that its products were unique and not sold by other retailers in New Zealand when in fact some of its products were readily available from competing suppliers.
  •  Spazio Casa also claimed that consumers would never find an equivalent item for less, when in fact 19 out of a sample of 120 products identified by the Commission were available at a saving of between 29 per cent and 229 per cent from competing suppliers.
  •  The company also misled consumers about the price of goods it offered for sale by failing to adequately disclose that the prices advertised were exclusive of Goods and Services Tax (GST).

In the settlement agreement, Spazio Casa admitted that the behaviour identified by the Commission was in breach of the Fair Trading Act.

"Although consumers should do their homework and shop around before making a purchase, ultimately consumers are entitled to rely on the information given to them by businesses", said Greg Allan, Commerce Commission Enforcement Manager. "It is important that businesses exercise care when advertising their products, and consider how consumers are likely to interpret and perceive that advertising, to ensure it is not potentially misleading."

Under the terms of the settlement, Spazio Casa will display a notice in each of its stores advising consumers of the contraventions of the Fair Trading Act. Spazio Casa will then endeavour to compensate any consumer who has suffered loss arising out of the contraventions.

Spazio Casa cooperated with the Commission investigation. In response to the Commission's concerns, Spazio Casa immediately closed its website for review, removed all hard copy advertising material, and instigated further training of sales staff.

Background

Spazio Casa is a New Zealand registered company with its head office, distribution centre and a showroom in Auckland. It has eight franchised retail outlets throughout New Zealand.

The Fair Trading Act. Breaches of the Fair Trading Act may result in prosecution in court. Companies found guilty of breaching provisions of the Fair Trading Act may be fined up to $200,000 and individuals up to $60,000. Only the courts can decide if a representation has breached the Fair Trading Act.