KEY POINTS:
EziBuy, Australasia's largest catalogue retailer, has been fined $8500 for selling shawls as silk blend pashmina when they were not.
EziBuy pleaded guilty to breaching the Fair Trading Act in the Auckland District Court yesterday.
Between February 2007 and November 2007, EziBuy sold shawls with labels that said
"pashmina" with "70 per cent pashmina and 30 per cent silk".
The Commerce Commission investigated and found the shawls were actually made of cotton and polyester, with no pashmina or silk content.
EziBuy sold over 11,000 falsely labelled shawls in Australia and New Zealand for $19.95 - of those, 3870 were sold in New Zealand.
One hundred per cent pashmina shawls usually sell for around $425.
Commission director of fair trading Adrian Sparrow said consumers were misled by the labels.
"The marketing and labelling of the shawls would have led consumers to believe that they were getting a good deal with a quality product at a bargain price," Mr Sparrow said.
Many of EziBuy's customers brought their products online or through mail order and did not have the opportunity to inspect products, said Mr Sparrow.
"It is the responsibility of businesses to ensure that the labelling on their products is accurate and, if necessary, to undertake testing to assure themselves that labels and descriptions supplied by manufacturers are correct," he said.
Last year, EziBuy reached an out of court settlement with the commission over wrongly labelled "mohair" throws.
EziBuy initially ran into problems when it advertised and sold an acrylic/mohair throw as a "mohair throw" with "pure mohair pile" for 12 months from October 2005.
In September 2006 the label was altered to say "mohair pile woven into a wool acrylic nylon base" but the outer packaging still described the product as a mohair throw.
EziBuy promised the commission that all future stock would be accurately labelled and packaged, but later was charged after selling the pashmina shawls as cashmere rather than a cotton mix.
Founded by brothers Peter and Gerard Gillespie in 1978, EziBuy has sales of about $150 million and employs about 650 people to sell clothing and homewares throughout Australasia via the internet, and mail catalogues.
In Australia, EziBuy cut a deal with the commission's local counterpart, the Australian Competition and Consumer Commission (ACCC) and offered refunds to Australian purchasers of both its mohair throws and pashmina shawls after acknowledging its fabric labelling and advertising may have been misleading and deceptive.
- NZPA
