AN ELECTRICAL giant has been fined thousands of pounds for selling second-hand computers as new.

The decision was hailed today as "great news for consumers" by the watchdog group that brought the case.

DSG Retail Ltd, the umbrella company for Dixons, Currys, PC World and The Link, twice sold "new" computers at PC World at Monks Cross, York, which had been previously owned.

After a five-day case at Pickering Magistrates Court, District Judge John Foster ruled the company had breached the 1968 Trade Descriptions Act on April 3, 2002, when it sold a Toshiba 1800-814 laptop; and also on December 31, 2003, when it sold an Apple 700 CDRW, by stating they were "ex-display" and "new" when both computers were second-hand. He ruled the company also broke the law by giving a false trade description on both sales receipts.

Judge Foster fined DSG Retail Ltd £5,500, awarded its customers £2,184 compensation, and ordered the company to pay £28,000 prosecution costs.

The company had denied breaching the Trade Descriptions Act.

Matthew Boxall, of York Trading Standards, which brought the case, said: "These computers were sold on information that was blatantly wrong. The company hadn't done enough to prevent the wrong impression being given - this case shows there are serious consequences.

"The judge has imposed a significant fine, awarded substantial costs and fully compensated the victims. He has made it quite clear that businesses - whatever their size - cannot escape their responsibilities. It's great news for consumers and for those businesses who do all they can to prevent similar problems arising. It shows it pays to get it right.''

Ranjit Rai, of Leicester, bought the Toshiba laptop computer while on business in York, working for Nestl.

A discount was marked up on the sales sticker and the sales assistant told him it was an "ex-display" model. Five months later, when he began having problems downloading pictures of his daughter's wedding, Mr Rai complained to PC World and Toshiba.

He discovered it had been previously owned by a company and returned as faulty.

Mr Rai told the court: "Had I been told it was second-hand I wouldn't have bought it. Why should I go to PC World to buy a second-hand unit?"

Simon Lee, of Chapel Street, Nunnington, near Helmsley, and his partner, Jacqueline Frith, bought an Apple 700 CDRW from the same store.

Mr Lee said they were told by an assistant that it had a discount because it was an "ex-display" model.

"He reassured me that in purchasing that computer it was as good as new. It came with all the guarantees and warranties and he implied that it hadn't been out on the shelf that long," said Mr Lee.

The pair soon experienced problems with their computer. Miss Frith made dozens of calls and wrote numerous letters to PC World and Apple, and the computer was sent for repair three times.

In one of the phone calls to Apple, Miss Frith said she was shocked to find it had been owned by someone else.

The firm alleged that all three customers were told when they bought the computers that they were exchange products.

But Judge Foster said: "I am quite satisfied as to the veracity of each of the three complainants. They gave evidence in a measured and honest way."

The firm also tried to prove a "due diligence" defence, by arguing that the company took reasonable precautions to prevent such offences, with operations systems, training programmes and auditing.

But Judge Foster said there was a "degree of confusion" in the operating system at the Monks Cross store, and he was concerned that new staff members were only given 40 minutes to learn the procedure for dealing with returned stock.

He concluded the firm took inadequate steps to ensure that staff carried out procedures relating to exchanged goods, and added that the procedures themselves were flawed.

After the case, a PC World spokesman said: "This was an unfortunate case of human error and there was no intent on our part to mislead the customers. We have comprehensive processes in place to ensure that mistakes are not made and during the hearing the judge praised our procedures. We are disappointed with the outcome and we are currently considering an appeal."

Updated: 10:16 Monday, April 18, 2005