Harvey Norman fined $7,500

Media Release

Issued 11 May 2001/49

Harvey Norman fined $7,500 for misleading claims about computer screens: advertisers must understand technical terms that they use

The conviction and fining of Harvey Norman Stores (NZ) Pty Limited in the Manukau District Court today is a warning to all advertisers who use technical terms: they must understand what the terms mean.

Commerce Commission Chair John Belgrave said that Harvey Norman was fined $7,500 for making misleading claims about the screens on Compaq Presario 1245 notebook computers. The screens were not of the quality claimed.

When interviewed by Commission staff, Harvey Norman's New Zealand general manager for computers said that the technology was relatively new, was not well understood and the company did not realise that it had used terms incorrectly.

"The message is simple," Mr Belgrave said. "Advertisers must know what they are talking about. It is their responsibility to get it right.

"Technical terms used incorrectly can mislead customers into believing that they are getting a better product and can unfairly disadvantage competitors."

In this case, Harvey Norman's advertisements stated that Compaq Presario 1245 notebook computers had "HPA Active Matrix Displays". Active screens are a selling feature of computers because they give a better quality image. These computers did not have active screens.

The screens were HPA, which is an improved type of passive screen.

Harvey Norman sold approximately 100 Compaq Presario 1245 notebooks in New Zealand.

The prosecution relates to advertisements published in The Press and New Zealand Herald newspapers, and followed a complaint from a rival computer retailer.

The complainant first contacted Harvey Norman and pointed out the mistake in the advertisements. Two weeks later the advertisements were repeated with the same mistake, and the complainant then contacted the Commission.

Media contact: Chief Investigator Christchurch Stuart Wallace Phone work (03) 371 0297, cellphone 025 868 219

Senior Advisor Communications Vincent Cholewa Phone work (04) 498 0920, home (04) 477 0039

Commission media releases can be viewed on its web site www.comcom.govt.nz

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