High Street jewellery chain H Samuel has been fined £60,000 after pleading guilty to 17 breaches of the Consumer Protection from Unfair Trading Regulations.
The company, owned by Signet Trading Limited, was investigated by the trading standards service of Torfaen Council in Wales for use of unfair pricing promotions online.
The breached related to sale of the ‘Forever Diamond’ range and the company’s misleading use of reference prices and intervening prices on the H Samuel website between November 2017 and June 2018.
What went wrong?
Reference pricing is used by retailers in price promotions to demonstrate good value by referring to another, typically higher, price for a product.
Retailers also have to show any intervening prices, where the item has been on sale at a price lower than the higher reference price. In practice, the highest reference price is not always the last price the item was sold at.
In both situations, customers can be misled into understanding whether they are actually receiving a good deal or the best discounted price.
At the hearing at Newport magistrates court on Friday 8th February 2019, the judge heard that H Samuel’s website had failed to inform consumers that items had previously been on offer for sale at lower intervening prices.
This meant customers were unaware whether they were receiving a genuine bargain. H Samuel also made price comparisons on its website for longer periods than the higher price was offered.
This practice was found to have influenced consumers into make purchasing decisions based on misleading information.
The company pleaded guilty to 17 breaches of the consumer regulations. In its defence, Signet asserted it was of good character and deeply regretted the matter, with measures having since been put in place to avoid future breaches. It also stated the actual gain by the company following sales of the affected items amounted to around £6,500 from £200,000 sales.
In his ruling, District Judge Shomon Khan accepted the breaches resulted from system failing rather than a deliberate attempt to mislead consumers, and gave Signet credit for their guilty pleas, good character and co-operation with the investigation.
The company was fined £60,000 and was ordered to pay legal costs to the Council of £13,382.
The ruling highlights the efforts of trading standards teams to take enforcement action where retailers fail to comply with consumer protection legislation, to ensure fairness for both consumers and competitors who are compliant with the regulations.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
