Federal Court rules against Prouds

NATIONAL: The Federal Court has found Australasian jewellery retailer Prouds misled consumers into believing its products were being sold at discounted prices.

The case centred around an accusation by the Australian Competition and Consumer Commission (ACCC) that the brand had breached the Trade Practices Act by advertising certain jewellery items its catalogues published to coincide with Valentine's Day and Mother's Day 2006.

The advertising was in the form of "was and now" price comparisons of 17 different jewellery items.

Justice Moore found the the "was and now" advertising siggested to cosnumers the items had been offered for sale at a resonable period immediately before the catalogue promotion.

However, each of the items had not been offered at the "was' price in that period and that advertising of each of the items was misleading, he said.

"...The evidence overall plainly points to Prouds not being concerned about whether items in a promotional sale had been offered for sake at the 'was' price immediately before the promotional sale commenced."

ACCC chairman Graeme Samuel said the decision was an important warning to businesses that consistently conducted sales promotions of the need for accuracy in advertising.

This was particularly true in relation to price which was so important to consumers' purchasing decisions, he said.

"It is not enough for the seller to simply decide what would be a 'fair' higher price before discounting from that high price. If you make a was/now price comparison you must have genuinely offered the product at the 'was' price for a reasonable period immediately before your sale promotion."