The Federal Court took a strong stance against misleading and deceptive practices in the online marketplace by imposing a $1M penalty on online florist and gift retailer Bloomex for breaching the Australian Consumer Law through false and misleading representations.
This came after Bloomex admitted to:
1. publishing misleading star ratings for its products (e.g., customer reviews for products prepared and delivered outside Australia, ratings from people who may not have been their customers, etc.);
2. advertising products at a discount when they had not generally sold products at the ‘strikethrough price’; and
3. adding surcharges that were inadequately disclosed.
According to ACCC Commissioner Liza Carver, “Bloomex misled consumers about the quality and price of its products for a long time, and this penalty is an indication of how seriously the court views this conduct.”
She added, “Misleading online reviews and star ratings are an issue of significant concern to us because they can influence consumers into purchasing from a business, when they would not otherwise have done so,”
On top of the penalties, the Federal Court also imposed injunctions, ordering Bloomex to establish a compliance program and pay the ACCC’s costs.
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