In a previous article, we discussed the ACCC’s action against four retailers that had made false or misleading representations about discounts on particular items of furniture.
The ACCC has now also taken action against Outdoor Supacentre Pty Ltd, trading as 4WD Supacentre (4WD Supacentre) for similar conduct. 4WD Supacentre was issued with five infringement notices by the ACCC for misleading consumers about ‘was/now’ price comparisons advertised on its website.1
As a result, 4WD Supacentre paid five infringement notice penalties totalling $63,000 and provided the ACCC with an undertaking2 that it would:
- Cease and refrain from engaging in was/now pricing conduct;
- Place corrective advertising on its website for 30 days; and
- Review all advertising material, implement a compliance program and maintain it for a period of three years.3
In the period between December 2018 and January 2019, 4WD Supacentre advertised some of its bestselling products with “was/now” statement advertising. According to the ACCC media release, these products had not been advertised at the “was” price for a three month period beforehand.4
As noted in our previous article, some key factors in determining whether the “was/now” advertising is false or misleading are:
- Whether the goods were previously offered for the “was” price;
- How long the goods were offered at that price, and whether that was a reasonable period of time before any reduction in price or sale of the goods; and
- Whether customers would actually achieve a saving.
What is considered to be a reasonable period will vary depending on the circumstances of each case, the type of product that is being sold, the market and the nature and frequency of price changes in the specific industry.5
Businesses must ensure that statements relating to discounted pricing are not misleading about the savings that a customer may achieve. Under the Australian Consumer Law, inaccurate pricing claims could result in a breach of the prohibition on misleading or deceptive conduct under section 18 of the Australian Consumer Law and/or amount to a false or misleading representation with respect to price in breach of section 29(1)(i) of the Australian Consumer Law.
Commenting on the inaccurate “was/now” pricing advertised by 4WD Supacentre, ACCC Acting Chair Mick Keogh stated that the ACCC was “very concerned that this was misleading consumers into thinking they could achieve significant savings with 4WD Supacentre, when this was not necessarily the case”.
According to Mick Keogh “Businesses must tell the truth when advertising “discounted” prices, and must not fabricate increased savings.”
“All businesses should ensure they provide consumers with accurate price information, enabling informed choices by consumers based on potential savings and an even playing field for competing businesses which are doing the right thing,” Mr Keogh said.6
Businesses planning to use comparison pricing in their marketing or advertising materials, should consider the following:
- Has the product they are selling previously been offered for sale at the “was” price?
- Did the customer have a reasonable opportunity purchase the product at the “was” price?
If the answer is no to either or both of the above questions, businesses should proceed with caution to ensure that they do not fall foul of consumer protections laws in the Australian Consumer Law.
This article was written by Teresa Torcasio, Partner and Ruth Trevenen-Williams, Solicitor.
2 Competition and Consumer Act 2010 (Cth), section 87B.