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Zamels, accused a second time of misleading advertising
Zamels, accused a second time of misleading advertising

ACCC prosecutes Zamel’s for ‘misleading’ price ads – again

Zamel’s has been taken to task by the Australian Competition and Consumer Commission (ACCC) for misleading catalogue advertising for the second time in five years.
The consumer watchdog has started legal proceedings against Zamel’s parent company, The Jewellery Group, in the Federal Court in Adelaide.

The ACCC alleges that in its May 2010 catalogue, Zamel’s misrepresented the savings to be made on 44 jewellery items that could be purchased by consumers during the retailer’s Sale period.

It also alleges that for 20 of those items, Zamel’s misrepresented the savings to be made by consumers on other occasions between November 2008 and January 2010 too, in one or more catalogues and a flyer.

By using statements such as “$99 - $49.50” or “Was $275 Now $149”, Zamel’s represented the savings customers made to be the difference between the higher and lower price if the items were purchased during the sale period, according to the ACCC.

The ACCC alleges that this was not the case.

The ACCC is seeking:
* declarations that Zamel’s engaged in conduct in contravention of sections 52 and 53(e) of the Trade Practices Act 1974 that has since been renamed the Competition and Consumer Act 2010
* a court order that the company publish a corrective advertisement in relation to the conduct
* a court order that the company implement a compliance and training programme penalties for the conduct that occurred in May 2010
* costs.

A directions hearing for this matter is scheduled for April 19, 2011, at the Federal Court in Adelaide.

This case follows a similar instance in December 2006 when the ACCC commenced legal proceedings against the then family-owned Zamel’s for “two-price” advertising conduct.

In respect to the prices of 11 jewellery items in its 2005 Christmas catalogue, Zamel’s was found guilty of falsely advertising that the purchase of items would result in a saving of the difference between a strikethrough price and a lower Sale price.

The Federal Court found that Zamel’s had not sold the items at a strikethrough price for a reasonable period prior to the Sale.

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