‘Manipulating, misleading’: Commerce Commission prosecutes The TV Shop
The TV Shop is being sued for allegedly deceiving customers, including surreptitiously posting favourable online reviews and erasing negative ones.
The Commerce Commission said it has brought 13 representative charges against The TV Shop (owned by Auckland-based company Brand Developers Limited) that are centred on marketing and promotional strategies, which the commission believes have the potential to deceive New Zealand consumers.
The Commission alleges that The TV Shop breached the Fair Trading Act by:
- Misleading consumers about the popularity of goods when staff members posted reviews on various online review platforms about products without disclosing their affiliation to the business and removed some low-rating reviews on its own website.
- Misleading consumers about remedies available to them if something went wrong with their products by implying to consumers that they did not have any other rights to refunds or remedies outside of its own ‘30-day Money Back Guarantee scheme’ or ‘risk-free trial’ when consumers wanted to return products because they believed they were faulty or mis-advertised. In fact, consumers may have had rights and remedies available to them under the Consumer Guarantees Act.
- Misleading consumers about the nature of products sold when it advertised promotion(s) for its Air Roaster Pro, offering an accessory pack variously as “free” or a “bonus” and on a “special offer” when the Air Roaster Pro was never offered for sale without the accessory pack, and the product was sold as a “special offer” continuously between 2018 and 2021.
“This case involves three different kinds of representations made to consumers which the commission alleges were misleading,” said Vanessa Horne, the Commerce Commission’s GM of fair trading.
“It should emphasise for businesses the importance of making sure that all promotional and marketing activities are accurate, unambiguous and not misleading.”
But Horne advises that while customers are entitled to believe that statements made by firms are accurate, she urges people to pause and shop around before making a purchase decision.
Since 2015, the commission has successfully prosecuted The TV Shop twice. It was fined $123,500 last year for failing to comply with extended warranty disclosure regulations, and the company was fined $153,000 in 2015 for falsely claiming that a ladder being sold or promoted had a certification when it did not.
Further reading: Tumu stores sale raises issues for Commerce Commission