TV advertising company fined $1.04 million for misleading customers
The TV Shop which is behind well-known infomercials used fake customer reviews.
Auckland company Brand Developers Limited, trading as The TV Shop, has been fined $1.04 million for misleading customers through fake reviews and false claims about their rights. The Commerce Commission found BDL, behind popular brands like Thin Lizzy, solicited friends and family to post reviews and removed unfavorable ones from its website.
Deputy chair Anne Callinan of the Commission described manipulating online reviews as unacceptable. When staff fabricated ratings and concealed negative feedback, potential customers were deceived into believing the products were superior. The Commission had previously prosecuted The TV Shop in 2015 and 2022 for similar offenses.
In 2015, the company was fined $153,000 for falsely claiming a ladder met certification standards, and in 2022, it was penalized $123,500 for failing to disclose extended warranty terms. Judge Belinda Sellars KC of the District Court also ruled that BDL misled customers about their rights under the Consumer Guarantees Act by instructing call center staff to downplay their entitlements beyond a 30-day return policy.
The court emphasized that BDL's efforts to enhance online ratings and reviews through deceptive practices were significant, as consumers rely heavily on these assessments when making purchases.
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