JB Hi-Fi’s NZ arm found guilty of false price advertising

By Chris Nicholls

AUCKLAND: New Zealand appliance retail chain Hill and Stewart has been found guilty on 14 counts of false price advertising by the New Zealand Commerce Commission.

Eleven of the charges claimed Hill and Steward advertised the price of a washing machine as being interest free, when the interest free price was greater than the cash price. The company was also found guilty on two charges of false representation of the price of a washing machine and one charge of claiming washing powder was included with a washing machine when the cost was incorporated into the final retail price.

The Auckland District Court ordered the company to pay a $75,000 fine and $2,070 in costs.

Commission chair Paula Rebstock said Judge Mathers, in sentencing the company, described the company’s actions as careless and widespread, affecting all 11 stores.
“This conviction should send a very clear signal to the retail industry. It is now well established that if ‘interest free’ claims are to comply with the Fair Trading Act, then the prices for those products must be the same as the cash prices”, she said.

“The price of the goods to consumers who purchased items on credit terms was significantly higher than the cash price,” Rebstock said.

The company is now owned by the JB Hi-Fi Group and is named JB Hi-Fi Group New Zealand, although all charges were laid before the JB Hi-Fi purchased the company.
The conviction is not the first for Hill and Stewart, who received five previous convictions for offending against the Fair Trading Act and Credit Contracts Act in 1999.
At the time, Hill and Stewart had a business relationship with the Appliance Connexion Limited (‘ACL’).  ACL owns the trademark “100 per cent Your Electrical Store’, which it franchised to 75 members nationwide.
The New Zealand Fair Trading Act prohibits misleading or deceptive conduct and false or misleading representations. Section 13(g) specifically prohibits false or misleading misrepresentations about the price of any goods or services. Only the courts can decide if a representation has breached the Fair Trading Act.

JB Hi-Fi was contacted with regard to this story, but had not replied prior to publication.

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