As part of court enforceable undertakings Australian Opal Cutters Pty Limited will remove misleading price comparisons and stop using an Australian Competition and Consumer Commission letter in its promotional material.
In selling a variety of jewellery and gemstones, predominantly opals and pearls, AOC referred to 'normal retail price' in its advertising and marketing material from at least 2005 until March 2009.
Based on its market research AOC represented that the 'normal retail price' was the price a consumer would pay for an item if purchased from competitors.
"The ACCC believes the market research did not provide a sufficient basis upon which a 'normal retail price' could be accurately determined or quoted," ACCC acting chairman Peter Kell said.
"By comparing its prices with the so called 'normal retail price' AOC was in danger of misleading consumers about the value for money they were getting.
"When making price comparisons, businesses must ensure they have accurate, up to date figures which will stand up to close examination."
From September 2007 to February 2009, AOC also included a letter it received from the ACCC in a folder that was made available for customer perusal along with testimonials from previous customers.
Mr Kell said the ACCC does not approve or endorse any products or advertising by any company.
"The display of the ACCC letter alongside customer testimonials could wrongly lead consumers to conclude that the ACCC approved of or endorsed AOC's advertising practices."
In response to concerns that AOC may have breached the Trade Practices Act 1974, it has offered the ACCC a court enforceable undertaking that it will:
- no longer refer to 'normal retail prices' in its advertising or in any invoices provided by AOC to its customers
- remove all copies of the ACCC letter from material accessible by its customers
- not advise its customers that AOC has been 'cleared', 'previously cleared' or 'checked out' by the ACCC
- implement a trade practices compliance program, and
- place a notice acknowledging the conduct on its websites and at its premises.