E-tailers must tread carefully, says Commerce Commission

Fresh warnings were given yesterday to local e-tailers that they cannot make misleading claims, after the Auckland District Court fined a phone retailer $7,000 for breaching the Fair Trading Act.

Fresh warnings have been given to local e-tailers that they cannot make misleading claims.

The Commerce Commission told them to be on their guard on Tuesday after Auckland District Court fined a phone retailer $7,000 for breaching the Fair Trading Act.

The Commision says this is its third Website case in just five weeks.

"Business must understand that the Act applies to claims made on websites, in email and to e-commerce in general, the same way that it applies to other media," commission chair John Belgrave says.

"This has been our view for some time and we are now taking court actions to get legal precedents to support and develop that view," he says.

Cogent Communications, trading as Hart Candy, did not disclose compulsory additional costs and conditions for Telecom "Go Prepaid" cellphone packages on their website between November and January.

The extra costs were displayed in store but the court ruled that the website claims were misleading and unlawful and had enticed customers into their Grafton store.

Hart Candy chief financial officer Steve Fullerton says this was an "unintentional mistake" by the company, which he says was corrected by the company before the Commerce Commission had a look.

Changes have since been made to the website, he says, and the company has also improved its website complaince programme.

However, Fullerton declined to say whether anyone was disciplined for the "mistake."

Earlier this month, the Commerce Commission took action against Michael Hill Jeweller for breaching the Fair Trading Act for advertising watches it did not have in stock.

Australian firm Starworks was also prosecuted recently for advertising PCs in New Zealand it could not supply.

The Commerce Commission this month also pledged to beef up its monitoring of Kiwi websites, saying it could not view them all, but would look at many and follow-up complaints made by the public.

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