As part of a court enforceable undertaking Global Enterprises (Qld) Pty Ltd, trading as Allure Gold, will offer refunds to consumers and retailers who may have been misled by its online representations.
The wholesaler of gold jewellery products will also take steps to inform independent retailers that they are free to discount and sell products at any price they choose.
Allure Gold operates www.alluregold.com and distributes products via a network of retailers throughout Australia.
The Australian Competition and Consumer Commission accepted the undertaking after concerns were raised that Allure Gold had engaged in resale price maintenance and misrepresented consumer warranty rights as well as the composition of certain jewellery items.
Resale price maintenance occurs when suppliers prevent independent retailers from advertising or selling products below a specified price.
The ACCC considers that Allure Gold engaged in resale price maintenance by sending an email to its retailers in May 2010 directing them not to sell Allure Gold products for less that 18 per cent off the recommended retail price.
"Resale price maintenance can take many forms," ACCC chairman Graeme Samuel said today. "Requiring independent resellers not to discount a product below a certain price is illegal.
"Businesses must allow independent distributors of their products the freedom to determine the prices at which they sell. Ultimately, it is the consumer who benefits from such freedom in the market."
In addition, Allure Gold made a number of misrepresentations regarding the thickness of gold on some of its products, its offer of an unconditional lifetime guarantee, and the manufacturer of Allure Gold products.
The law prohibits corporations from engaging in conduct that is misleading or deceptive or likely to mislead or deceive. It also prohibits corporations from making false representations, including those about composition of a product and the effect of any warranty or guarantee.
In order to address these issues, Allure Gold has provided a court enforceable undertaking to the ACCC pursuant to section 87B of the Competition and Consumer Act 2010* .
As part of the undertaking accepted by the ACCC, Allure Gold will:
- send a letter to all retailers notifying them of the undertaking provided to the ACCC and informing them that they are able to set whatever minimum price they each choose at which they advertise, sell, display or offer goods for sale
- place a corrective notice on their website, and ask retailers to place a corrective notice in-store.
- provide a full refund to any consumers or retailers that feel they have been misled as to composition.
- establish and implement a trade practices law compliance program.
Mr Samuel said this is a timely reminder that businesses must ensure that they comply with relevant legislation at all times.
"Business should regularly review claims they make about products to ensure they remain accurate and up to date," he said. "Businesses should also take special care to not mislead consumers about their consumer rights and warranties."
Consumers or retailers who wish to obtain a refund should contact Allure Gold on 1300 539 355.
A copy of the undertaking is available on the ACCC's website at http://www.accc.gov.au/content/index.phtml/itemId/968951
*On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010