The Australian Competition and Consumer Commission is taking legal action against Zamel's, alleging the jewellery giant mislead customers.
The commission alleges that "in advertising 44 jewellery items in its May 2010 catalogue, Zamel's misrepresented the savings to be made by consumers by purchasing the items during the catalogue sale period".
The ACCC has started legal proceedings in the Federal Court in Adelaide against Zamel's parent company The Jewellery Group.
"The ACCC also alleges that for 20 of those items, between November 2008 and January 2010, Zamel's also misrepresented the savings to be made by consumers in one or more catalogues and a flyer," the commission said.
"By using statements such as . . . "was $275 Now $149" the ACCC alleges Zamel's represented consumers would save the difference between the higher and lower price if the items were purchased during the sale period when that was not the case."
It is alleged that the retail chain contravened the Trade Practices Act, which has since been renamed the Competition and Consumer Act 2010.
The ACCC is seeking declarations that Zamel's engaged in conduct in contravention of the Act and a court order that the company publish a "corrective advertisement in relation to the conduct".
It also wants a court order that the company implement a compliance and training program, penalties for the conduct that occurred in May 2010, and costs.
A directions hearing for this matter is listed for April 19.
Zamel's has about 100 stores in Australia, including more than 20 in WA.