Staff at the infomercial retailer behind brands such as Thin Lizzy and the Transforma Ladder have been found to have posted fake online reviews while the company hid negative feedback from customers.
Brand Developers Ltd, trading as The TV Shop, was convicted in the Auckland District Court on 13 charges following breaches of fair trading laws spanning nearly four years, according to the Commerce Commission, which brought the legal action.
According to the commission, the court found TV Shop staff members posted reviews on various online review platforms about products without disclosing their affiliation to the business, and at its behest and sometimes for reward.
"In some cases, the staff member concerned had not even used the product in question but gave it a positive review. The evidence also indicated The TV Shop requested employees ask friends and family to leave reviews.
"The company also methodically removed some low-rating reviews on its own website.
"When customers posted a one, two or three-star rating, their review was not published unless they responded to a follow-up email from the company."
Judge Sellars KC said the relevance of several staff reviews, identified by the commission during the case, was “to demonstrate that the posting of undisclosed staff reviews was not an anomaly but the result of a concerted effort".
Not so special offers
The TV Shop also "misrepresented consumers’ rights to refunds or other remedies and made misleading claims about 'free' or 'bonus items'".
The bonus item that wasn't anything extra
An example given included its "popular Air Roaster Pro:, which was advertised as having an accompanying “free” or “bonus” item, or “special offer” accessory pack.
"But the reality was that this product was always sold with the accessory pack – customers were not getting anything extra," said a commission spokesperson.
Commerce Commission deputy chairperson Anne Callinan said: "The law is very clear – businesses must not mislead consumers through reviews that are not what they seem."
"When people are looking to buy a product, they will often read online reviews to help them make an informed decision.
"Consumers should be able to trust that the reviews posted are genuine. They should also be able to trust that genuine customer reviews are not excluded in order to positively skew product ratings".
The court also found The TV Shop systematically denied customers their rights under the Consumer Guarantees Act if something went wrong with a purchased product.
"It did so through policies and instructions to call centre 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’.
"In fact, those who had purchased the product may have had rights and remedies, such as a refund where products were defective," according to the Commerce Commission.
The TV Shop has been successfully prosecuted twice since 2015 by authorities.
In 2022, The TV Shop was fined $123,500 after failing to comply with an extended warranty disclosure requirement.
In 2015, the business was fined $153,000 for misrepresentations that Transforma ladders being sold or advertised had a certification when it did not.
The matter will now progress to a penalty hearing.
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