Zamel’s Jewellers fined $250,000 by Federal Court

As reported previously by Jeweller, after action brought by the ACCC, the Federal Court found that Zamel’s, which at the time of the offences consisted of between 93 and 101 stores, had misrepresented the savings consumers would make from purchasing jewellery items.

The 44 jewellery items in question, which included lcokets and pendants, were included in one or more Zamel’s catalogues and one advertising brochure distributed nationally, instore and on Zamel’s’ website between November 2008 and May 2010.

At the time, Zamel’s was owned by The Jewellery Group Pty Ltd.

Today, the ACCC issued a release saying that: “As originally reported, the Court found that by using statements such as “$99 $49” or “Was $99 Now $49”, Zamel’s represented to consumers, who were unaware that they could obtain discounts outside Zamel’s sales periods, that they would save an amount being the difference between the higher and lower price if the items were purchased during the sale when that was not the case. 

“In respect of the 44 jewellery items, it was found that Zamel’s had either not sold the items at the higher price, or that it had sold a very limited quantity at the higher price prior to the sale commencing.”

Originally, the court found that discounting was common practice in Zamel’s stores and as such the ”was” price was rarely, if ever, the price that was paid by customers outside of the sale period, and therefore the actual savings during the sales event were not as significant as those implied in the advertising.

It’s not the first time Zamel’s has been caught misleading the public with false advertising, although the previous judgement was brought against former owners Ascot Four Pty Ltd.

Zamel’s was eventually fined $380,000 in 2009 after an investigation by the ACCC led to the Commonwealth Director of Public Prosecutions laying charges against the jewellery retailer on December 2006. 

The Federal Court in Adelaide found Ascot Four had falsely represented that the purchase of each of the 11 items during a sale period would have resulted in a saving of the difference between the sale price and the strike through price in breach of section 75AZC(1)(g) of the Trade Practices Act 1974, which prohibits false or misleading representations being made in relation to the price of goods.

Subesquently, in September 2011, Zamel’s Jewellers was sold to Mumbai-based M Suresh Group DMCC, one of the world’s largest jewellery manufacturers.