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Kogan Slammed In Federal Court Over Dodgy Discounts

Online retailer Kogan is again in the cross hairs of the Australian Competition and Consumer Commission this time over allegedly dodgy discount claims.

The ACCC claims Kogan hiked its prices by an average of 12 per cent on more than 600 products, only to advertise an end of financial year 10 per cent discount sale in June 2018.

The hearing taking place in the Federal Court heard lawyers for the ACCC claim that Kogan tricked customers into thinking they were getting a discount on 621 products during the 48-hour sale.

CEO Ruslan Kogan

The consumer watchdog claims Kogan’s misleading 10 per cent discount claim was sent to 10 million customers.

Kogan is accused of creating a false sense of urgency by using advertising such as “48 hours left!” and “Ends midnight tonight!” during the promotion Founder Ruslan Kogan was told by members of his marketing team that he should not refer to the promotion as a “discount.”

“We say the ordinary and reasonable consumer would have understood them to convey that the prices that would be reduced were the same price as before the tax time promotion,” the commission’s barrister Penny Neskovcin, QC, told the Federal Court.

After the promotion finished, claimed Kogan dropped many of the products back to their original price, the ACCC claims.

Kogan has denied the allegations, arguing price fluctuations are common in e-commerce.

The ACCC launched legal action last year, claiming the advertising was misleading or deceptive.

This is not the first time that Kogan has found himself in strife with the ACCC.

In 2016 the Company was fined $32,400 in 2016 for allegedly increasing the price of computer monitors, only to advertise a 20 per cent discount Fathers’ Day promotion on online marketplace eBay.

Kogan was also forced to modify its advertisements in 2009 after the ACCC raised concerns over the way it displayed price comparisons.

The trial continues.

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