The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Godfreys Franchise Systems Pty Ltd over price representations of its Nilfisk A100 vacuum cleaners.
Godfreys is a franchisor and retailer of vacuum cleaners throughout Australia.
In February 2007, Godfreys promoted a Nilfisk A100 vacuum cleaner which was new to the Australian market and a model exclusively sold by Godfreys.
In a catalogue distributed in some locations of Perth, Western Australia, Godfreys made the representations "$124.50, NILFISK, HALF PRICE!", and caused signs to be displayed in some Godfreys stores that read "Clean Up Sale! Nilfisk $249 ½ Price $124.50".
Godfreys has acknowledged that the half-price representations for the product in circumstances where it had not previously been offered for sale may be misleading and deceptive in contravention of section 52 the Trade Practices Act 1974.
The ACCC has accepted court enforceable undertakings from Godfreys that it will:
- refrain from using comparative price advertising of vacuum cleaners by referring to specific previous (or 'was') prices for goods where those goods have not been readily available from Godfreys prior to the promotion
- arrange for an information notice to be displayed in the franchise stores covered by the catalogue
- publish a corrective notice in a Godfreys superstore catalogue in Western Australia, and
- establish and implement a trade practices law compliance program.
"Advertised discounts must be real and not illusory," ACCC Chairman, Mr Graeme Samuel, said today. "Comparative price advertising is a common practice in a number of industries and the ACCC will not hesitate to act in situations where comparative price advertising is used in such a way that may mislead consumers."