DSG Retail, the umbrella trading group that includes Dixons, PC World, Currys and The Link, has been fined thousands of pounds for selling second-hand computers as new.

In a case brought by York Trading Standards, the group was found to have acted in breach of the 1968 Trade Descriptions Act.

The court heard how the York branch of PC World had sold a Toshiba 1800-814 laptop and an Apple 700 CDRW iMac marked as “ex-display”, when in fact both devices had had previous owners.

In both cases, the true status of the machines only came to light when they broke down and their owners contacted the respective manufacturers.

DSG Retail was fined £5,500 and ordered the company to pay £28,000 prosecution costs. The judge awarded the two customers £2,184 compensation, to cover the price of their computers and telephone complaints.

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 for businesses that act in this way.

"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.''

DSG had denied breaching the Trades Descriptions Act and alleged that both customers had been told that their computers were exchanged. The company also tried to claim that it had adequate processes in place to ensure that returned goods were not sold as new. These processes were said to include operations systems, training programmes and auditing.

However the judge stated that he believed the evidence of the customers that they had not been made aware of the goods’ status at the point of sale, and concluded that there was a "degree of confusion" in the operating system at the York PC World branch.

Trading Standard’s Matthew Boxall said that his office’s investigation found the processing of returned goods to be far from efficient. He stated that staff training was inadequate: “Staff were given only 40 minutes to digest and understand this key aspect of their business,” he said

Boxall went on that inconsistencies in the audit report provided by DSG for the York store suggested that returned goods weren’t being processed properly. He also cites a letter that one of the customers was sent regarding their equipment, which was so “garbled and full of mixed messages” that it was plain the person who had written it hadn’t understood the returns procedure.

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."

In the wake of the Trading Standards investigation and the judge’s decision, the York Trading Standards office will be making recommendations to the Hertfordshire office, which advises DSG Retail on their business.

This is not the first time that DSG Retail has been found guilty of a breach of the Trades Descriptions Act. In July 2003 Havering Magistrates Court fined the group £2,000 with costs of £5,000 for selling a second-hand handheld computer as new. In February 2004, Bolton Magistrates Court fined the group £4,000 with costs of £2,000 and compensation of £1,400 for selling a second-hand PC as new.