In a case of bad behaviour finally catching up, Shonky Award-winning online florist Bloomex has been ordered to pay a $1 million penalty for publishing misleading star ratings, promoting fake discounts and engaging in drip pricing.
The Canada-based company, which has facilities across Australia, was taken to court by the ACCC in December 2022 and fined in Federal Court earlier this month.
Bloomex had acknowledged its tactics contravened the Australian Consumer Law.
Bloomex misled consumers about the quality and price of its products for a long time ...
ACCC Commissioner Liza Carver
"Bloomex misled consumers about the quality and price of its products for a long time, and this penalty is an indication of how seriously the court views this conduct," says ACCC Commissioner Liza Carver.
"Misleading online reviews and star ratings are an issue of significant concern to us because they can influence consumers into purchasing from a business, when they would not otherwise have done so."
A bouquet of offences
The court case revealed that some star ratings were for products prepared and delivered outside Australia, while others were from people who may not have been Bloomex customers.
And there were other issues as well.
Bloomex misled consumers about the quality and price of its products for a long time
ACCC commissioner Liza Carver
From February 2019 through November 2022 Bloomex offered products at 50% off prices that were artificially inflated, giving customers the false impression that they were getting a deal. In fact, the inflated prices had never been charged.
More recently, between August 2022 and March 2023, the company failed to adequately disclose the surcharges it tacked onto orders ranging from $1.95 to $4.95, a prohibited practice known as drip pricing.
When we ordered flowers from Bloomex in 2022, what arrived looked very different to the images on their website.
Failure to deliver earns Bloomex a Shonky
CHOICE had received numerous complaints about Bloomex before finding out how unreliable the business was for ourselves in the lead-up to the 2022 CHOICE Shonky Awards.
We ordered bouquets to be sent to 21 regional addresses in Queensland, NSW, Victoria, South Australia, Tasmania and WA.
After eight of the orders failed to arrive, Bloomex had a solution. They'd pass the order on to a local florist for an extra $20 to $30 dollars. Refunds were not on offer.
When the business did manage to fulfil its orders, about half of them arrived late, and most of the flowers were in sad shape.
Fake reviews in regulator crosshairs
While its flower delivery services were poor, Bloomex was quite competent at online marketing: it was dominating search engine results, and its star ratings were impressive.
Given the input CHOICE received from actual customers, it's not a surprise the ratings didn't reflect customer satisfaction.
Fake online reviews is an area of ongoing interest for the regulator.
When the business did manage to fulfil its orders, about half of them arrived late, and most of the flowers were in sad shape
The ACCC has a priority to investigate "manipulative or deceptive advertising and marketing practices in the digital economy, where it is often harder for consumers to verify claims made by businesses," says Carver.
In addition to the $1 million in penalties, Bloomex has been ordered to establish a program to ensure compliance with Australian Consumer Law and to pay the ACCC's court costs.
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