Employees of the infomercial company owning brands like Thin Lizzy and the Transforma Ladder have been caught posting fake online reviews while suppressing negative customer feedback.
Brand Developers Ltd (BDL), operating as The TV Shop, was convicted in Auckland District Court on 13 charges for breaching fair trading laws over nearly four years.
The Commerce Commission initiated the legal proceedings.
ComCom said the court determined TV Shop staff posted reviews on multiple online platforms for its products without disclosing their business ties, often at the company’s direction and sometimes for payment.
“In some cases, the staff member concerned had not even used the product in question but gave it a positive review,” Commerce Commission said.
“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.”
The company withheld publication of one-, two-, or three-star customer reviews unless recipients replied to a follow-up email.
“The law is very clear – businesses must not mislead consumers through reviews that are not what they seem,” Commerce Commission Deputy Chair Anne Callinan said.
“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 ruled that The TV Shop systematically denied customers their rights under the Consumer Guarantees Act when purchased products proved faulty.
The TV Shop also made misleading claims about “free” or “bonus” items. Its popular Air Roaster Pro was advertised from 2018 to 2021 as including an accessory pack labelled a “free” or “bonus” item or “special offer.” In reality, the pack was always bundled with the product, offering customers no extra value.
Judge Sellars KC stated that Commission-identified staff reviews from the case were relevant “to demonstrate that the posting of undisclosed staff reviews was not an anomaly but the result of a concerted effort by the BDL.”
The judge also endorsed an expert witness’s view that “BDL’s review omission systematically lowered the availability of negative information about its products to consumers.”
Judge Sellars KC also pointed to a “pattern of BDL employees representing to aggrieved customers that its terms and conditions and company policies take precedence over New Zealand consumer law.”
“Such broad denials of liability are of concern,” she said.
Meanwhile, Callinan delivered a clear message to businesses: “Be honest with your customers.”