The Federal Court has today ordered Bloomex to pay $1 million in penalties after the online florist and gift retailer admitted that it had breached the Australian Consumer Law by making false and misleading representations on its website.
Specifically, Bloomex admitted that it had published misleading star ratings for its products, advertised products at a discount when they had not generally sold products at the ‘strikethrough price’, and added surcharges that were inadequately disclosed.
“Bloomex misled consumers about the quality and price of its products for a long time, and this penalty is an indication of how seriously the court views this conduct,” ACCC Commissioner Liza Carver said.
“The ACCC focuses on investigating manipulative or deceptive advertising and marketing practices in the digital economy, where it is often harder for consumers to verify claims made by businesses.”
“Misleading online reviews and star ratings are an issue of significant concern to us because they can influence consumers into purchasing from a business, when they would not otherwise have done so,” Ms Carver said.
Bloomex had displayed products for sale on its website between February 2019 and March 2023 with a ‘star rating’ that remained static since January 2015, and included customer reviews for products prepared and delivered outside Australia, as well as ratings from people who may not have been Bloomex customers.
“The star ratings displayed by Bloomex were misleading about the extent to which other consumers were satisfied with Bloomex’s products and may have led to false assumptions about whether those products were suitable for them,” Ms Carver said.
In addition, between February 2019 and November 2022, Bloomex published ‘strikethrough’ prices, ‘half price’ or ‘50% off’ discount statements in relation to its products on its website, even though it had not generally sold the products at the higher prices displayed, which was a false or misleading representation to consumers about the value of the discounts they would receive if they purchased these products.
Further, between August 2022 and March 2023, Bloomex admitted that it had failed to adequately disclose that it was imposing a surcharge ranging from $1.95 to $4.95 on orders made via its website.
Adding extra fees and charges to the initial price throughout the checkout process online is known as drip pricing.
“Businesses must be upfront, and clearly disclose to consumers the total price for their products, including what types of fees will apply. They must not display prices that are incorrect or likely to create a false impression,” Ms Carver said.
In addition to ordering Bloomex to pay penalties, the Court also imposed injunctions, and ordered that Bloomex establish a compliance program and pay the ACCC’s costs.
Bloomex admitted its breaches of the Australian Consumer Law during the course of the ACCC’s legal proceedings.
Further information on price displays is available at the ACCC website.
Background
In early December 2022, the ACCC instituted proceedings against Bloomex for allegedly publishing misleading online star ratings and price representations.
Bloomex receives customers’ orders for floral and other gift products through its website or over the phone and then prepares those orders in warehouses for delivery across Australia.
Bloomex has production facilities in New South Wales, Queensland, Victoria, South Australia, and Western Australia. Bloomex also outsources orders to local florists to fulfil, as needed.
In February 2022, the ACCC issued a warning to consumers and put the online florist industry on notice about its concerns about reports of false or misleading representations about the location of online florists.
In December 2022, United Florists Pty Ltd trading as Lily’s Florist and Elysium Marketing Pty Ltd, provided the ACCC with a court-enforceable undertaking in relation to misleading representations that Lily’s Florist was a local florist. In addition, florist Fig & Bloom Pty Ltd has removed potentially misleading representations from 940 web pages that may have given the impression that it was a local business in a specific suburb.
In May 2023, the ACCC instituted proceedings against Meg’s Flowers Pty Ltd for allegedly making false and misleading representations that it was a local florist.