Six carpet and furniture retailers are under investigation for using misleading reference pricing.
The Office of Fair Trading has officially opened its investigation into whether the businesses were misleading consumers into thinking that they are getting a bargain by artificially inflating prices in order to promote sales.

It found "systematic examples" of reference pricing where the retailers had advertised a higher price for a product to demonstrate the new price as being good value for money. The retailers were using a mix of "was" prices, "half price" deals and "after event" sale prices to mislead customers, but the OFT found that there were a significant number of products amongst certain high street retailers where no sales at all took place.

While the six companies were being monitored, the overall average of sales at the reference price was 5% and one company had a reference sale price average of 16%. In all cases, no explanation was provided on how and when these reference prices were established.

Carpetright has confirmed it had been contacted by the OFT as part of the investigation. It said: "Carpetright strives to operate fully within all laws and regulations at all times."

OFT director Gaucho Rasmussen said: "Reference pricing can mislead consumers and impair their judgement, as buying an item immediately means they do not get the chance to search the market for the real best deals.

"We have contacted a number of carpet and furniture retailers asking them to review their pricing practices and sign legally enforceable undertakings."

Which? executive director Richard Lloyd added: "The OFT's warning sends a clear message to carpet and furniture stores that special offers really have to be special."

The companies have until autumn this year to respond to the OFT before it considers taking further action.