Diamond seller fined $220,000 for misleading consumers
On 9 July 2008 diamond merchant, Carrerabenz Diamond Industries Pty Ltd, pleaded guilty in the Federal Court in Brisbane to 27 charges laid against the company by the Australian Competition and Consumer Commission for misleading consumers in the promotion of a series of diamond sales.
The court heard that the company placed six advertisements in national newspapers promoting diamond sales at exhibition venues in Sydney, Melbourne, Adelaide and Perth between January and March 2003.
The advertisements listed each diamond or item of diamond jewellery with a unique stock number, together with a 'usual marked price' and a 'crazy price'. In each case, the 'usual marked price' was substantially higher (by between 42 per cent and 233 per cent*) than the 'crazy price' offered to consumers at the sales.
The company admitted to the court that the items had not previously been offered for sale in Australia, or offered at the 'usual marked price' as claimed.
In fining the company a total of $220,000, Justice Logan said the purchase of a diamond can be a very special thing that a consumer will spend some time saving for, and usually for a special occasion. He said the company had engaged in a course of criminal conduct which was of the type that was not easy to detect and which involved considerable investment of public funds in its investigation and prosecution.
Justice Logan said the penalty reflected the need for deterrence, to ensure that the company and those who control it complied with the consumer protection provisions of the Trade Practices Act. He said it should also serve as a reminder to those who in trade or commerce make misrepresentations in advertisements, that such behaviour is criminal conduct and liable to an appropriate penalty.
In welcoming the court's decision, ACCC Chairman, Mr Graeme Samuel, said the ACCC would vigilantly pursue businesses that used false or misleading price comparisons to dupe consumers.
"In this case, consumers were enticed by the company's misleading advertising to attend the diamond sales in the mistaken belief that they would be getting a bargain based upon the difference between the 'usual' and 'crazy' price."
