Commerce Commission – misleading pricing and representations

Today’s announcements by the Commerce Commission about its investigation into a range of issues affecting the sale of steel mesh, including the 29 charges filed against Steel and Tube for making false and misleading representations about their steel mesh product known as SE62 – makes for interesting reading. I suspect that the Steel and Tube matter is likely to be quite fact-specific.

Perhaps of wider interest will be the outcome of the charges filed by Comcom earlier this year against two other distributors in relation to false and misleading representations about steel mesh – in which guilty pleas have been entered.

In the meantime, the Commerce Commission has recently published an open letter to retailers (copy attached), highlighting pricing practices which might breach the law.

The letter includes a one-page summary of tips for retailers to consider when planning price promotions, including:
• ensure discounts are taken off the usual selling price
• don’t use fine print to hide important information like extra charges
• a ‘sale’ is a brief and limited opportunity to buy at a reduced price
• ‘clearance’ sales are only for clearing goods
• don’t exaggerate savings to be made or the range of goods available at a discounted price
• be careful with claims like “lowest” and “cheapest” prices.

If you require further information about the ComCom’s view on such issues – including access to the open letter and Comcom fact sheets on pricing and fine print, please do not hesitate to contact me.