A jewellery company was fined $50,000 for misleading customers over the worth of diamond-studded items sold during sales held in hotels.
Carrerabenz Diamond Industries Limited pleaded guilty in Auckland District Court yesterday to breaching the Fair Trading Act.
The Auckland-based company had used Australian insurance valuations, converted toa New Zealand figure and adjusted for GST and taxes, to give its jewellery a price value.
The value was then heavily discounted, and the pieces sold in sales held in Auckland and Wellington hotels in 2003.
The company advertised the sales on radio and television, saying its goods were 80 per cent cheaper than prices charged by major retailers and independent valuers.
The Commerce Commission investigated the company after receiving complaints from customers and other retailers over how much the jewellery was actually worth.
In one case, a customer presented a ring to an independent valuer, who gave it an undiscounted price of less than what he paid for it at the apparent sale.
The commission's fair trading branch acting director Stuart Wallace said the company expected to make about $1.4 million from the sales.
"Customers were led to believe they were purchasing jewellery which was worth the values advertised and that they were making large savings buying it at the sale price," he said.
"Traders must ensure when quoting valuation prices that they are relevant to the market in which the goods are being sold.
"Representations as to a saving to be made must be actual savings."
The company, convicted on 21 breaches of the act, was fined $49,500 and ordered to pay $520 costs.
