Misleading “was / now” prices

Public news

The ACCC have issued infringement notices against four furniture retailers to the tune of $12,600 each, following an investigation by the ACCC into the use of “was/now” price comparisons in advertising and all members should take note of this case.

Following the investigation, the ACCC found the companies had reasonable grounds to believe each retailer had made false or misleading representations by claiming that consumers would save money if they purchased certain furniture items when this was not the case.

The retailers used advertising statements such as ‘was $2599, now $2049’ or ‘$799, save $200’, when the furniture item had never been advertised at the ‘was’ price, or was only advertised at the ‘was’ price for a short period of time.

For example, one of the retailers advertised a ‘Roller Ottoman’ at a price of $539 with the words ‘save $360’, even though it was available for $449 directly before the sale, while another advertised a chair with the words ‘$799, save $200’, when its usual price for the previous six-months was $699, $100 cheaper than the ‘sale’ price.

The important message for any automotive business is they must ensure that any claimed savings are accurate and based on a ‘before’ price which has been offered for a reasonable period when using comparison advertising. If there are no genuine savings, businesses are therefore misleading consumers, which may result in investigation and / or prosecution by the ACCC.

The MTA has developed a new car pricing guide and we are available to assist you to ensure you are pricing your cars and other items appropriately. Click here to enquire about the guide.

If you need advice or assistance with any matters relating to Australian Consumer Law, contact the WR team on (08) 8291 2000 or via email by clicking here.