The first court case resulting from the Commerce Commission's crack down on false or misleading claims by furniture retailers ended today with the Napier District Court fining retailer Furniture Now Limited $8,000.
Commission Chair John Belgrave said that the Commission prosecuted Furniture Now after it advertised a "fantastic start up package deal" but would not provide all the items advertised, and in the same catalogue advertised pine furniture as "solid rimu".
Furniture Now today admitted that it breached the Fair Trading Act through misleading conduct in relation to goods and by making false claims that goods were of a particular composition.
Furniture Now featured its "fantastic start up package deal" on the front page of its catalogue. It offered a lounge suite, dining suite, coffee table, rug and "entertainment unit with large TV, video, Sky, stereo and heaps of storage". The advertisement stated "you get the lot for only $2,199". There was even a large photo so that customers could see what they would get.
Customers complained to the Commission when they discovered that the TV, Sky and stereo were not included in the package.
Furniture Now said that there had been a printing error, which it spotted before the catalogues were distributed, and it had put up correction signs in its store. It did not stop distribution of the catalogue nor attempt to correct it.
Furniture Now also advertised a "Melody" brand TV and video cabinet set as "solid rimu". This furniture was made of pine and had a rimu-coloured vinyl finish. The Commission laid this charge as representative of several items of pine furniture advertised as rimu.
Furniture Now director, Robert Duckworth, had previously been warned by the Commission about, what in the Commission's opinion, were misleading claims about the sizes of TV screens and the availability of a discount.
Mr Belgrave said that the Commission is disappointed that it is common for furniture retailers to make what the Commission sees as false or misleading claims.
"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," Mr Belgrave said. "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, the message did not get through. If compliance does not improve, prosecutions are likely to continue."
The most common Fair Trading Act issues among furniture retailers are:
