Photo: Unsplash
- The TV Shop staff posted fake customer reviews and prevented low-rating reviews from publishing
- The company is behind well-known names like Thin Lizzy and Transforma Ladder
- It was convicted of 13 charges under the Fair Trading Act, matter now moves to a penalty hearing
The company behind well-known informercials has been convicted of fair-trading breaches, after staff posted fake customer reviews and prevented low-rating reviews from being published.
The Auckland District Court found Brand Developers Limited (BDL), trading as The TV Shop, also misrepresented consumers' rights to refunds or other remedies, and made misleading claims about free or bonus items.
The TV Shop is the company behind well-known brands like Thin Lizzy and Transforma Ladder.
"The law is very clear - businesses must not mislead consumers through reviews that are not what they seem," Commerce Commission deputy chair Anne Callinan said.
The court found The TV Shop misled customers about the popularity and quality of goods, with staff posting reviews about products without disclosing their relationship to the business. It was convicted of 13 charges for breaches of the Fair Trading Act over a four-year period, with most of the offending occurring between 2017-21.
The Commerce Commission said, in some cases, staff had not used the product in question, but gave it a positive review. It said evidence presented also indicated that The TV Shop requested employees to ask friends and family to leave reviews.
The commission said the company also "methodically removed" some bad reviews on its website. It also said, when customers posted a one, two or three-star rating, their reviews were not published, unless they responded to a follow-up email from the company.
"Consumers should be able to trust that the reviews posted are genuine," Callinan said. "They should also be able to trust that genuine customer reviews are not excluded in order to positively skew product ratings."
The commission said The TV Shop also "systematically denied" customer rights under the Consumer Guarantees Act for defects or issues.
"It did so through policies and instructions to callcentre staff, which suggested to consumers that they did not have any other rights to refunds or remedies outside of The TV Shop's '30-day Money Back Guarantee scheme' or 'risk-free trial'," the commission said.
Judge Belinda Sellars KC pointed to a "pattern of BDL of employees representing to aggrieved customers that its terms and conditions, and company policies take precedence over New Zealand consumer law".
The matter would proceed to a penalty hearing.
The commission had successfully prosecuted The TV Shop twice since 2015.
In 2015, it was fined $153,000 for misrepresenting that a ladder being sold or advertised had a certification, when it did not.
In 2022, it was fined $123,500 for not complying with extended warranty disclosure requirements.
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