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Commission settles with Stoke Radio and Television

Issued 9 February 2006/097

Commission settles with Stoke Radio and Television

The Commerce Commission has reached a settlement with Stoke Radio and Television Limited in regards to the promotion of gifts and prizes during 2004.

The Commission investigated a complaint that Stoke Radio and Television had not honoured a "One in 20" prize draw offered during June and July 2004 and advertised both in the Nelson Mail and in-store.

In this case, consumers could have believed from the promotional advertising that, if they purchased one of six particular appliances, they had a one in 20 chance of winning their money back. However, in-store terms and conditions stated that the offer was only valid for a period of three months and that Stoke Radio and Television had the right to cancel the offer if 20 of each of the six items in the offer were not sold in that period.

Director of Fair Trading Deborah Battell said: "In this instance, not all of the relevant terms and conditions of the draw were published in the newspaper and consumers could have believed the offer would continue until each of the 20 items was sold."

After discussions with the Commission, Stoke Radio and Television accepted that a number of people who purchased promotional goods at the store whilst the prize draw was running may have been disadvantaged and so agreed to change the way that the promotion would be drawn. All people who purchased goods during the promotional period would be entered into new draws and the winners would receive a refund of their purchase price.

Ms Battell added that "the Commission is pleased that Stoke Radio and Television agreed to carry out the prize draw in the manner that it was understood by consumers. It is a fair result for consumers and an effective way of resolving the issue."

Background

The appliances offered as part of the "One in 20" draw were: a Simpson refrigerator, a Panasonic DVD recorder, a Sony digital camera, a Bosch washing machine, a Delonghi gas electric range and a Philips television set.

The settlement agreed between the Commission and Stoke Radio and Television requires Stoke Radio and Television to hold two draws involving the 42 consumers who had purchased the specified items during the three months of the promotion. The winners of each draw will receive their 'money back', equivalent to the price of the item they initially purchased.

Section 17(a) of the Fair Trading Act 1986 says that no person shall offer gifts, prizes or other free items without intending to provide them.

Breaches of the Act can result in prosecution; companies may be fined up to $200,000 and individuals up to $60,000.

ENDS

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