What you need to know
- The Federal court charged Dell Australia with a $6.5 million fine after being found guilty of providing misleading pricing information and discounts.
- Dell admitted to the allegations and cited that over 5,300 units have been sold using the ploy.
- The company was ordered to reimburse and issue corrective notices to the affected parties.
Given the tough and rough economic times, everyone always looks for discounted commodity prices. Deals are a source of joy for many, but what happens if you check out and find out that the discount isn't valid?
Well, this happens to be the case for Dell Australia, which was found to be presenting falsified discounts on its website for add-on computer monitors. As a result, the Federal Court fined the company a whopping 6.5 million US dollars (10 million AUS dollars).
Consumer trust in shambles
Dell Australia took full responsibility for the mishap that steered unsuspecting and intrigued customers to take full advantage of these deals. Unfortunately, there was more to the story than meets the eye.
In most instances, it was discovered that Dell leveraged this ploy on the price of a selection of monitors available to ‘bundle’ with a purchase of a desktop, laptop, or notebook. It was further cited that the company displayed a higher strikethrough price citing huge savings on the consumer's end.
And while this seemed like a steal at the time, Dell Australia confirmed that consumers were spending more money than they were supposed to on a product, even if they were purchasing it using the marked price.
Dell made sales well above the current market price, ploughing back maximum profits. An estimated 5,300 monitors were sold to users using this technique. Adding to this, the company also admitted that it also took advantage of customers using the discounted price of the add-on monitors by incorporating catchy terms such as "Total Savings" or "Discounted Price" to lure customers to these specific deals.
Liza Carver, ACCC Commissioner, indicated that the action taken against Dell Australia for providing consumers with misleading information is a strict warning to other businesses that might want to follow a similar route to amass wealth. The commissioner stated that the act breaches consumer law, citing that consumers use the pricing information retailers provide to make informed decisions while making purchases.
Aside from being fined, the court also moved to have Dell Australia reimburse and issue corrective notices to all the consumers affected by this ploy. Likewise, the company was also ordered to review its compliance program and cater for a fraction of the ACCC’s costs.
