High Street Jeweller Fined for Misleading Consumers

Posted on: Tuesday 12 February 2019
A graphic explaining how H.Samuel misled consumers

The owner of high street jeweller H Samuel has been fined £60,000 after it admitted misleading customers about price information presented on its website.

Signet Trading Limited, owner of H Samuel, pleaded guilty to 17 breaches of the Consumer Protection from Unfair Trading Regulations following an investigation by Torfaen Council’s trading standards service. 

The charges all related to the company’s ‘Forever Diamond’ range of rings on offer for sale on the H Samuel website between November 2017 and June 2018.

The charges relate to the use of ‘reference prices’ and ‘intervening prices’. Reference pricing refers to price promotions which aim to demonstrate good value by referring to another, typically higher, price. Retailers must also show ‘intervening prices’ where an item has been on sale at a price lower than the higher ‘reference’ price. In many cases the highest reference price is not always the last price the item was sold at. In both situations, customers can be misled into whether they think they are receiving a proper bargain.

Jonathan Elystan Rees QC, prosecuting on behalf of Torfaen County Borough Council, said the company’s actions meant shoppers were being influenced to make decisions based on misleading information. 

Mr Elystan Rees said: “A large company that takes advantage of unfair pricing promotions not only causes detriment to the consumer, who is influenced to make a decision based on misleading information, but also those competitors who are investing time, effort and cost to comply with the guidance.”

In a hearing at Newport magistrates court on Friday 8 February, the court heard that H Samuel’s website failed to inform consumers that items had previously been on offer for sale at lower 'intervening' prices.

This meant customers were unaware whether they were receiving a genuine bargain. H Samuel also made price comparisons on its website for materially longer periods than the higher price was offered.

H Samuel is one of the largest jewellery stores in the UK with 6000 employees and 480 stores nationwide. It is part of Signet Trading Ltd which is the world’s largest retailer of diamond jewellery.

Sam Evans, defending on behalf of Signet, said the company was of good character and deeply regretted the matter. He added lessons had been learned and the company had already been putting in place measures prior to the investigation taking place.

While the online sale of the discounted rings amounted to £200,000, Mr Evans said the actual gain by the company amounted to around £6500.

District Judge Shomon Khan said the profile of the company was one in which the consumer would place a high level of trust but accepted that this was a system failing rather than a deliberate attempt to mislead.

He gave Signet credit for their guilty pleas, good character and co-operation with the investigation.

Judge Khan fined Signet £60,000 and ordered them to pay costs to the Council of £13,382.

Councillor Fiona Cross, Torfaen's executive member for the environment, said: " The work of Torfaen’s trading standards team is vital to safeguard the economic well-being of the public.

"This case sends a clear warning to businesses that our trading standards officers will act in the interests of consumers and take enforcement action where traders fail to adhere to government guidelines and consumer protection legislation."

 

Last Modified: 12/02/2019 Back to top