Kogan slugged with $32k penalty for misleading advertising

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Kogan slugged with $32k penalty for misleading advertising
Ruslan Kogan.

ACCC goes after online retailer once again.

Kogan has paid a $32,400 fine to the Australian Competition and Consumer Commission after the consumer watchdog found it falsely inflated discounts as part of Father's Day promotion last year.

In the lead-up to Fathers’ Day, Kogan advertised on its eBay store that customers would receive a 20 percent discount if they purchased one of three selected computer monitors between August 24th and 29th 2015.

The models were a Kogan 27-inch Cinema Display, Kogan 28-inch 4k LED and an Asus 27-inch LED Monitor.

But according to the ACCC, the online discount retailer had in fact raised the prices on all three monitors immediately before the promotion began.

As a result of these increases, consumers really only received a 9 percent discount on the regular price.

After the promotion ended, the prices returned to their original levels.

“It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case," ACCC Acting Chair Michael Schaper said in a statement.

“Truth in advertising and consumer issues in the online market place are both current enforcement priorities.”

In its statement, the ACCC noted it can issue an infringement notice where it has reasonable grounds to believe a business has contravened Australian Consumer Law, and that payment of a penalty is not an admission that any laws have been breached.

The incident is not the first time Kogan has ended up on the wrong side of the consumer regulator over its advertising practices.

In 2009, the online retailer was actively promoting percentage and dollar price comparisons that the ACCC found were based on a hazy calculations of what consumers could be expected to pay for a product, rather than prices actually charged by Kogan.

iTnews has contacted Kogan for a response to the findings and is awaiting a response.

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