New Zealand’s TV Shop penalised $1.1 million for misleading customers
The TV Shop has been fined $1.104 million for misleading customers by having its staff write positive reviews about its products.
The company markets products under brands such as Thin Lizzy and Transforma Ladder on television infomercials.
According to the Commerce Commission, the firm’s employees posted positive product reviews without disclosing their affiliation with the business, a practice that would have misled consumers. Some of these staff did not even use the product in question.
In addition, the company removed some negative reviews from its website and did not publish reviews with one, two or three stars unless the customer responded to a follow-up email. No low-rating reviews were published at all for a period during 2020.
Commerce Commission deputy chair Anne Callinan said online reviews are increasingly relied on by Kiwis looking to buy products, and it is unacceptable to post or manipulate them in ways that mislead people.
“When you have staff post reviews without disclosing their affiliation, or when you remove negative reviews, you are effectively tricking potential customers. Kiwis should be able to trust online reviews are genuine and free of manipulation,” Callinan added.
Judge Belinda Sellars KC described The TV Shop’s tactics as “deliberate and systematic”, adding that managers and executives were aware of, and at times directed, the conduct.
“It is clear from the evidence that [The TV Shop] made concerted and repeated efforts to improve the online rating and reviews of its products and thereby deliberately mislead consumers.
“The methods that staff were instructed to follow for posting reviews were designed to circumvent Product Review and Google’s processes to stop non independent reviews,” Judge Sellars found.
Last December, the District Court also found The TV Shop systematically misled customers about their rights under the Consumer Guarantees Act.
Earlier this year, the ComCom filed further proceedings against the company, alleging it engaged in unconscionable conduct by using exploitative and misleading practices when selling high-value products to consumers.
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