ACCC Sues Kogan Over Alleged Fake Discounts [Updated]

The Australian Competition and Consumer Commission (ACCC) is suing online retailer Kogan, alleging the company created fake discounts that are in breach of Australian Consumer Law.

Kogan has been accused of running a misleading online promotion from June 27 – June 30 2018. The ACCC stated that Kogan raised the prices of more than 600 products before proceeding to include them in a 10% discount promotion.

In most cases the initial price hike was more than 10%, thus netting additional profit for the company.

The ‘deal’ was promoted on Kogan’s website, as well as pushed out to customers via email and text.

The ACCC is also claiming that Kogan created a sense of urgency towards the end of the campaign, emailing advertisements to customers that included phrases such as “48 hours left!” and “End midnight tonight!”

Consequently, these calls to action made customers believe that they only had a limited time to take advantage of the fake discounted prices.

“We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices. In fact, Kogan had inflated product prices which we say created a false impression of the effective discount,” ACCC Commissioner Sarah Court said, according to the documents.

“Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings”.

Shortly after the promotion ended, Kogan is said to have reduced the included prices back to their original, cheaper prices.

However, Kogan reduced the prices of the affected products shortly after the promotion ended, many back to their pre-promotion prices.

This is not the first time that the ACCC has taken Kogan to task. In 2006, the company was fined $32,400 for increasing the price of three monitors before including them in a Father’s Day sale.

And in 2009, concerns were raised over misleading savings claims and price comparisons made by the company.

The ACCC will be “seeking penalties, injunctions, declarations, corrective notices and costs” from Kogan.

Update 12:56pm:

Kogan has denied the ACCC’s allegations in a media release on the ASX. The company claims that the ACCC has ignore facts that it believes are relevant to the promotion and the impression it made on consumers.

You can read the statement in full here: