The Christchurch District Court has imposed the highest fine yet under the Fair Trading Act, $63,000, on Bond and Bond Limited after the company admitted breaching the Act by running a series of misleading advertising campaigns.
"I have no hesitation in characterising the defendants advertising strategy as knowing and deliberately deceitful," Judge M.J.Green said on sentencing Bond and Bond.
"This in my view the most serious aspect of the defendant's conduct by reason of it being deliberate and no doubt successful attempts to mislead the public," Judge Green said. "Counsel for the informant is correct when he categorises the defendant as having conducted a long and skilful subterfuge."
The Commerce Commission prosecuted Bond and Bond, and last week the company pleaded guilty.
Commission Chairman Dr Alan Bollard said that Bond and Bond was prosecuted in relation to 34 advertisements published in the Christchurch Press. Dr Bollard said that similar advertisements, except for the localities of the shops, had also been used in the four major cities.
· claiming that there were savings off Bond and Bond's usual prices, when the company had not normally changed the prices; and
· goods were advertised as interest free, when interest free terms were not available.
Dr Bollard said that Judge Green's sentence sets a significant new benchmark for fines under the Fair Trading Act, and the Judge also made important comments about how the level of fines should be set.
"Fines of course must be tailored to the means of the particular offender bearing in mind that the same fine for one offender may be an insuperable financial burden for that offender and well within the means of another," Judge Green said.
Judge Green also quoted from another case involving a different company: "traders must not be left with the view that it is worthwhile breaching the Act because the profits will outweigh the fine".
"Judge Green has given a clear indication that fines should be appropriate to the size of the company and must be a deterrent to any trader that might breach the Act," Dr Bollard said. "Bigger companies can face bigger fines."
Media contact: Fair Trading Manager Rachel Leamy
Phone work (04) 498 0908, cellphone 021 662 773, home (04) 386 3110
