Store warned for using price discounts it couldn’t back up

Media release

Issued 22 August 2018
Release no. 27

Online phone store warned for using price discounts it couldn’t back up

Amaysim Operations Pty Ltd, trading as Buy Mobile, has been warned by the Commission for the unsubstantiated claims it made about discounts on the price of some mobile phones.

The Commission believes Buy Mobile is likely to have breached the Fair Trading Act because it could not provide the grounds or information it relied on when advertising specific dollar savings for some of its advertised mobile phones. By law, businesses must have reasonable grounds for making a claim at the time it is made.

For example, Buy Mobile advertised a $930 discount on a Samsung Galaxy S5 selling for $339.90 on Buy Mobile’s website. Buy Mobile said its staff relied on publicly available information about competitor’s prices to make discount claims, but it could not provide the Commission with this information when asked to do so.

Buy Mobile has stopped making comparative pricing claims on its website and products are now being offered for sale with reference to the purchase price only.

Commissioner Anna Rawlings says price comparisons can give consumers useful information and can promote competition between retailers.

“At the time a claim is made traders should be able to explain the basis for it and show where they got the information from. When selling products like mobile phones where prices can change quite quickly, traders should have a system in place to ensure that any advertised discounts remain accurate and comparisons with other retailers are current.”

“It is unfair to consumers who rely on pricing claims and to other businesses offering genuine savings, if price savings are exaggerated, or comparative information is not from a credible and current source,” she said.

Background

Watch our video – If you can’t back it up, don’t say it
Consumers need to be able to rely on the accuracy of claims. It is illegal for a trader to make a claim about a good or service without any reasonable basis. You can watch our video If you can’t back it up, don’t say it and see more about unsubstantiated representations here.

You can also find information on the rules around pricing on our pricing webpage.

Commission’s role
A warning is not a finding of non-compliance; only the Courts can decide whether a breach of the law has occurred.

You can read the Commission’s Warning letter to Buy Mobile on our Case register shortly.

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