UCG.L Regulatory News (UCG)

two CARPET AND FLOORING FIRMS Change pricing Practices after OFT INVESTIGATION

Following an OFT investigation, United Carpets Group plc (United Carpets) and Nixon & Hope Ltd have changed their respective pricing practices.

United Carpets Group plc

United Carpets has signed undertakings that commit it to:

· ensuring that its advertised recommended retail prices are genuine and are those at which the products are typically sold throughout the year.

· refraining from using time-sensitive promotions such as 'closing down sale' or 'closing down for refurbishment' without giving consumers clear information and an explanation of the circumstances of the promotion.

Nixon & Hope Ltd

Nixon & Hope Ltd has agreed to change its practices after its Floors2go website was found to be advertising products at an initial square metre price which excluded VAT. The OFT also found that some claimed savings were incorrect. Furthermore, the OFT was concerned that the displayed prices were potentially misleading to consumers as they could not in fact buy the product at the price shown, and also that the savings being claimed were inaccurate.

Nixon & Hope has already amended its website to ensure any percentage savings claims are accurate. It has committed to amend further its website so that where a price is indicated to consumers a selling price including VAT will be given. This change will be completed in February.

Gaucho Rasmussen, OFT Director, Goods and Consumer Group, said: 'Shoppers rely upon clear, honest and upfront advertising of prices. When retailers advertise misleading prices or promotions, consumers often make different purchases - or spend more money - than they otherwise might have done. We therefore welcome the changes that United Carpets and Nixon & Hope have made, and agreed to make, to their pricing and marketing strategies.

'When buying big ticket items, consumers should always shop around and check that the price they are paying represents value for money.'

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Notes

1. You can see more updates on this case on the project webpage.

2. The OFT is separately investigating the use of potentially misleading reference pricing by other furniture and carpet retailers.

3. The Consumer Protection from Unfair Trading Regulations 2008 contain a general prohibition against unfair commercial practices and, specifically, prohibitions against misleading actions, misleading omissions and aggressive commercial practices. The Regulations are enforceable through the civil and criminal courts. Further information and advice for businesses can be found here.

4. Where a price is indicated to consumers a clear, unambiguous selling price inclusive of VAT must be given.

5. The OFT currently has 16 consumer enforcement cases open.

6. On 1 April 2014, the Competition and Markets Authority (the CMA) will become the UK's lead competition and consumer body. The CMA will bring together the existing competition and certain consumer protection functions of the OFT and the responsibilities of the Competition Commission, as amended by the Enterprise and Regulatory Reform Act 2013. The CMA, which is a non-Ministerial government department, was established on 1 October 2013 and will be taking on responsibility for cases and market studies from 1 April 2014. Click on the CMA's homepage for more information.

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