Kogan slapped for tax claims
Electronics retailer Kogan has been fined over claims made in a tax time promotion.
The Federal Court has ordered Kogan to pay a penalty of $350,000 for making false or misleading representations about a tax time sales promotion, in breach of Australian Consumer Law.
Kogan was found to have misled consumers by advertising that they could use the code ‘TAXTIME’ to reduce prices by 10 per cent at checkout, when the company had actually increased the prices of 621 products immediately before the promotion.
The prices of most of the products were increased by at least 10 per cent. Kogan then decreased those prices soon after the promotion ended, many back to their pre-promotion prices.
The issue affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets.
Towards the end of the promotion, Kogan also used statements such as ‘48 hours left!’ and ‘Ends midnight tonight!’ in some emails to consumers, to create a sense of urgency to entice consumers to make a purchase during the tax time promotion period.
In her judgment, Justice Davies said: “Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price.”
The Court also ordered Kogan to pay the ACCC’s costs of proceedings.