Duty Free Group gives undertakings over misleading advertising

4 December 2002

The Australian Competition and Consumer Commission has accepted court-enforceable undertakings from the Nuance Group Australia Pty Ltd over Downtown Duty Free and City International Duty Free misleading advertising earlier this year, ACCC Chairman, Professor Allan Fels, said today

The items advertised included watches, conventional and digital cameras, palm pilots, films, portable CD players, camera lenses and a recording mini-disc.

"The ACCC alleged that City International Duty Free published an advertisement in the Sunday Telegraph on 24 March 2002 which was misleading and deceptive by representing that consumers could get savings off the particular products' prices when the products had not been advertised at the higher prices for a reasonable time before the sale.

"The ACCC also alleged that City International Duty Free and Downtown Duty Free made similar representations about price savings available on products in City International Duty Free and Downtown Duty Free catalogues distributed between 18 March and 30 April 2002.

"The ACCC was concerned more broadly about claims being made by both Downtown Duty Free and City International Duty Free that products were exclusive to each store, when this was not so.

"The ACCC has also sought undertakings from Nuance that it will pay full refunds to consumers who were misled.

"While 'was/is' advertising can be a valuable marketing tool for businesses, it must be used with care. Businesses, particularly in the period leading up to Christmas, must ensure that claimed price savings are accurate and can be substantiated. Businesses which make misleading price claims or claim that products are exclusive to their stores gain an unfair advantage over competitors and risk action from the ACCC.

"The ACCC acknowledges that Nuance has responded in a positive and constructive way to the ACCC's concerns. It has agreed to a range of corrective measures and will develop and implement a trade practices compliance program".

Nuance has accepted that it had engaged in misleading and deceptive conduct and made false or misleading representations, contrary to the Trade Practices Act 1974, by advertising products at prices which claimed to be lower than previous selling prices when the products had not been sold at the higher prices.

Nuance has undertaken:

  • that Nuance will not represent that particular price savings are available when the products have not been offered at the higher price for a reasonable period before the sale;
  • that Nuance will not represent that products are exclusive to their stores when this is not so; 
  • to publish corrective newspaper advertisements and place corrective notices in-store for three weeks;
  • to offer full refunds to consumers who claim to have been misled by the representations; and
  • to develop and implement a trade practices compliance program.

Release number: 
MR 305/02
ACCC Infocentre: 

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