Millionaire Ruslan Kogan at the Kogan offices in South Melbourne. Picture: Jake Nowakowski
Millionaire Ruslan Kogan at the Kogan offices in South Melbourne. Picture: Jake Nowakowski

Kogan taken to court for allegedly misleading customers

THE ACCC has launched legal action against Kogan alleging it misled its by offering a 10 per cent discount code only after upping the prices on at least 600 products before the promotion.

The Australian Competition and Consumer Commission has issued Federal Court proceedings alleging Kogan made false or misleading representations and breached consumer law.

"Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings," ACCC commissioner Sarah Court said.

The ACCC alleges that between June 27 and 30 June 2018, Kogan ran an online promotion where consumers could obtain the discount on most of its products by using the discount code "TAXTIME".

The promotion was held ahead of the end of the 2017/18 financial year.

Kogan published this promotion on its website and via text messages and emails to consumers.

"We allege that Kogan's advertisements were likely to have caused consumers to think they were getting products below their usual prices. In fact, Kogan had inflated product prices which we say created a false impression of the effective discount," Ms Court said.

Towards the end of the promotion period, Kogan's email advertisements used statements such as "48 hours left!" and "Ends midnight tonight!" which the ACCC alleges gave the impression that consumers only had a limited time to purchase at the "discounted" prices.

However, Kogan reduced the prices of the affected products shortly after the promotion ended.

Many items went back to their pre-promotion prices.

The ACCC is seeking penalties, injunctions, declarations, corrective notices and costs from Kogan.