Zamel’s ordered to pay $250,000 for misleading consumers

21 January 2013

The Federal Court has imposed a penalty of $250,000 on The Jewellery Group Pty Ltd, trading as Zamel’s, for misleading consumers regarding savings made on jewellery, following action brought by the Australian Competition and Consumer Commission.

On 16 August 2012, Justice Lander found that Zamel’s had misrepresented the savings consumers would make from purchasing items during sale periods for 44 jewellery items featured in one or more Zamel’s catalogues and a flyer distributed nationally by letter box drop, in-store and on Zamel’s website between November 2008 and May 2010.

The Court found that by using statements such as “$99 $49.50” or “WAS $275 NOW $149”, Zamel’s represented to consumers, who were unaware that they could obtain discounts outside Zamel’s sales periods, that they would save an amount being the difference between the higher and lower price if the items were purchased during the sale when that was not the case. In respect of the 44 jewellery items, it was found that Zamel’s had either not sold the items at the higher price, or that it had sold a very limited quantity at the higher price prior to the sale commencing.

Today, Justice Lander imposed a $250,000 penalty on Zamel’s in relation to its May 2010 catalogue, the only conduct subject to a civil penalty. His Honour stated that the penalty reflects the seriousness of the conduct and the need to deter other retailers from engaging in similar conduct. His Honour stated “Zamel’s should be deterred from engaging in any further conduct of this kind. Moreover, the penalty must be sufficient to deter any like-minded retailer from engaging in the same conduct.”

ACCC Chairman Rod Sims said that the penalty was a clear message to businesses that the court takes a dim view of this sort of conduct.

“The ACCC has taken steps to ensure consumers are not misled as to savings they may make when retailers advertise goods. In this very competitive market, consumers are vulnerable to false and misleading tactics and the penalty imposed by the court today should serve as a stern warning to other retailers,” Mr Sims said.

Justice Lander also made declarations and ordered that Zamel’s publish corrective notices in newspapers and on its website, implement a trade practices compliance program and pay the ACCC’s costs.

Zamel’s conduct was found to be in breach of sections 52 of the Trade Practices Act 1974*, which prohibits conduct that is misleading or deceptive or likely to mislead or deceive. Zamel’s also contravened section 53(e) of the Trade Practices Act 1974, which prohibits making false or misleading representations with respect to the price of goods or services.

*On 1 January 2011 as part of Australian Consumer Law amendments, the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010

Release number: 
NR 005/13
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