"Leather" lounge suites were vinyl and leather

Media Release

Issued 30 October 2000/106

More Commission action on furniture retailing:
"leather" lounge suites were vinyl and leather

Commerce Commission action against misleading claims by furniture retailers continued today with the sixth successful prosecution since March-the Tauranga District Court fined Homeworld (Tga) Limited $6,500 for breaching the Fair Trading Act.

The director of Homeworld told the Commerce Commission that, in his view, it was acceptable to describe vinyl and leather furniture as "leather" lounge suites.

A customer who responded to Homeworld's advertising and bought a vinyl and leather lounge suite believing that it was 100 percent leather disagreed and complained to Homeworld.

Homeworld would not accept the complaint. The director told the Commission that he had not misrepresented the suites to the customer so did not feel obliged to do anything about the complaint.

In Court today, Homeworld pleaded guilty to breaching the Act, which prohibits misleading conduct in relation to goods. Homeworld also maintained that it had systems in place for its staff to advise customers that the lounge suites were vinyl and leather.

In sentencing the company Judge McKegg stated that to advertise in one fashion but then advise staff to tell customers something different should have set alarm bells ringing.

Commission Chair John Belgrave said that false or misleading claims were an on-going problem in the furniture retailing industry.

"Furniture retailing is one of our target industries for Fair Trading enforcement action," Mr Belgrave said. "We will continue investigations and more prosecutions are likely until compliance improves."

False or misleading claims about the composition of furniture-in this case that vinyl and leather furniture was leather-are among the most common problems.

Other common problems include false or misleading claims about the price of furniture, not providing the goods advertised and not providing gifts or prizes that had been offered.

Recent Fair Trading Act prosecutions of furniture retailers:
* Hazelwoods Home Traders Limited, Upper Hutt District Court, total fines $15,000 for not providing all the items advertised in a "fantastic start up package deal", and for describing pine furniture as "solid rimu"
* Panmure Furniture City 1983 Limited, Auckland District Court, $10,000 fine and costs for offering free gifts with the intention of not providing them as offered
* Furniture Now Limited, Napier District Court, total fines $8,000 for similar breaches to those committed by Hazelwoods,
* Garry Brian McCone and Stephen Jack Brian, trading as Christchurch Auctions, total fines $6,500 for describing vinyl and leather furniture as "leather lounge suites", and
* Waitemata Backcare Beds and Waterbeds Limited, Waitakere District Court, $3,500 fine for an offer described as "interest free" that was not genuinely interest free.

Media contact: Fair Trading Manager Ross McPherson
Phone work (04) 498 0909, cellphone 021 627 909, home (04) 232 6004

Communications Officer Vincent Cholewa

Phone work (04) 498 0920, home (04) 473 3827

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