Professional Public Relations, who last month were spruiking The Kogan Kevin 37-inch 1080p television have been left with egg on their face after their client Kogan Technologies was slammed by the ACCC for misleading advertising. The television, which costs $900, was being advertised as a way to spend the Federal Government stimulus package handout.

This is the same company that claimed it was set to be the first company to deliver a Google Android phone in Australia but only days before the scheduled launched pulled the plug with insiders telling SmartHouse that the company did not have the money to “manufacture the product in the first place”.

Kogan Technologies Pty Ltd, who has been under investigation for some time, has told the ACCC that they have now modified their advertising after the Australian Competition and Consumer Commission raised concerns.

The ACCC said that Kogan’s advertising on its website and in the Herald Sun could mislead consumers about the savings that they would get.

Kogan Technologies sells Kogan brand home entertainment products.  It had significant publicity when Channel 7’s Today Tonight promoted it as a direct importer offering considerable savings by cutting out wholesalers.

Kogan Technologies’ newspaper advertisement and website used price comparisons such as Now $X (Save Y%) and save over $X. The products had not been offered by Kogan Technologies at the higher price.  The savings were based on an estimated average price a consumer might pay for a product with similar specifications from another manufacturer.

The ACCC was concerned that this conduct may have contravened sections 52 and 53(e) of the Trade Practices Act 1974.

“Comparison pricing is a strong marketing tool, particularly in times of financial uncertainty when consumers don’t want to spend more than they have to,” ACCC Chairman, Mr Graeme Samuel, said today. “However, retailers must make sure these comparisons are accurate so consumers can make an informed choice.”


The ACCC raised further concerns about the use of an estimated average price to calculate savings as it does not take into account other value-adding features which frequently accompany electrical goods, such as warranties and reputation (and in some cases, proprietary technology).

Kogan Technologies has provided the ACCC with court-enforceable undertakings that it will:

  • not advertise its goods at a discount unless that product has been advertised for sale or sold in reasonable quantities at the higher price for a reasonable amount of time before the representation
  • not make representations regarding the savings which are available to purchasers of Kogan goods unless it clearly states the basis on which those savings are calculated
  • implement a trade practices law compliance program.

“Retailers must keep in mind that a comparison in value does not equate to a comparison in price,” Mr Samuel said,  “Value comparisons should be clearly identified by, for example, identifying the brand name, features, and model.  Price comparisons, on the other hand, should only be made where the good or service has previously been offered or sold for the higher price.”

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