Warehouse to pay $3,000 for false claims about bicycles
Published24 Nov 1995
Repeating false claims about the bicycle safety standard cost the Warehouse $3,000 in the Wellington District Court today.
"If advertisements are published containing false information, the Commission has a duty to ensure compliance, and one way of getting the message home, is by prosecuting the culprit, even if the false representation arises from commercial carelessness," Judge E. Unwin said when he found the company guilty earlier this month.
He ordered it to pay $1,500 to a charity of its choice and $1,500 to the Commerce Commission to go towards prosecution costs.
The Commission prosecuted the Warehouse after it again published an incorrect advertisement saying it had spent months organising a manufacturer and then carried out laboratory tests to ensure Radz bicycles met the safety standard that would "probably" be introduced in New Zealand.
"The advertisement gave the impression that people buying this product from the Warehouse would get a safer bicycle than they might get from another shop," Commission Chairman Dr Alan Bollard said.
"But the Warehouse was not offering more than it was required to by law, the standard had already been in force for two years."
Furthermore the much organised and tested Radz bicycles were not available at all. Other bicycles were available at the advertised price.
Dr Bollard said the Commission had warned the Warehouse when the same advertisement had been used previously. The advertisement was repeated at a time when the Commission was receiving many complaints about Warehouse advertising.
"Since then, the Warehouse has gone to considerable effort to introduce a compliance programme and to discuss possible problems with the Commission," he said. "I am very pleased with the responsible approach it is now taking to compliance with the law."
It is important to note that in this case the Warehouse was not prosecuted for a breach of the bicycle safety standard. The Fair Trading Act includes product safety standards, but it also prohibits false or misleading representations.
The Warehouse was found guilty of falsely representing that goods were of a particular kind (section 13(a)) and making "a false or misleading representation concerning the existence, exclusion, or effect of any condition, warranty, guarantee, right or remedy" (section 13 (i)).
Media contact: Communications Officer, Vincent Cholewa
