The TV Shop is facing court for allegedly misleading shoppers, including using its own staff to secretly post positive online reviews and removing negative ones.
The Commerce Commission announced today it has filed 13 representative charges against The TV Shop, owned by Auckland-based company Brand Developers Limited.
A representative charge reflects more than one incident.
The charges focus on marketing and promotional practices the commission believes were likely to mislead New Zealand consumers.
Its general manager of fair trading, Vanessa Horne, said the case involved three kinds of representations made to consumers which the commission alleged were misleading.
Horne said the charges should emphasise for businesses the importance of making sure that all promotional and marketing activities were accurate, unambiguous and not misleading.
The Commission alleges The TV Shop breached the Fair Trading Act by:
- Misleading consumers about the popularity of goods when staff members posted reviews on various online review platforms about products without disclosing their affiliation to the business and removed some low-rating reviews on its own website;
- Misleading consumers about remedies available to them if something went wrong with their products by implying to consumers they did not have any other rights to refunds outside of its own “30-day Money Back Guarantee scheme” or “risk-free trial” when consumers wanted to return products they believed were faulty or wrongly advertised. However, consumers may have had rights available to them under the Consumer Guarantees Act.
- Misleading consumers about the nature of products sold when it advertised promotions for its Air Roaster Pro, offering an accessory pack as “free” or a “bonus” and on a “special offer” when the Air Roaster Pro was never for sale without the accessory pack, and the product was sold as a “special offer” continuously between 2018 and 2021.
“Consumers are entitled to take information provided by retailers at face value whether that information relates to pricing, the nature of the products on offer, consumer rights or the endorsement or experiences of other consumers,” Horne said.
“These issues go to the heart of the Fair Trading Act and the Commission’s compliance and enforcement work.
“Businesses should check they have compliant reviews processes and policies, training processes in place regarding rights to refunds or remedies, and compliant promotional practices.”
Horne said while consumers were entitled to trust the representations businesses made were accurate, they were also encouraged to pause and shop around before rushing into a purchasing decision.
Shoppers should read reviews across different platforms to get a picture of the product they’re buying, read the terms and conditions, and understand their rights under the Consumer Guarantees Act.
“If time allows, track prices over time and shop around to make sure you’re getting the deal and making the savings that you expect.”
Horne said now the current case was before the court the commission could not comment further.