Six high street carpet and furniture retailers are under investigation for using artificially high prices to exaggerate sales and price cuts.
The Office of Fair Trading (OFT) said it opened the investigation after finding that many retailers in the sector were misleading customers into thinking they were getting a bargain by artificially inflating the original price.
It found "systematic" examples of artificially inflated reference pricing within the industry, through the use of 'was' prices formerly charged by the retailer, 'after sale' prices that the trader intended to charge in the future, or recommended retail prices (RRPs) set by the manufacturer.
During monitoring of the six companies - which the OFT is not yet naming in the hope of reaching a speedy resolution with them - the overall average of sales of items at the reference price was just 5%.
The OFT said there were a significant number of products sold by some retailers where no sales at all took place at the artificially inflated price.
In all cases, no explanation of how and when these higher prices were established were provided.
The OFT has written to the six retailers asking them to stop using the pricing practices that mislead consumers, giving them until autumn to respond.
The OFT investigation comes ahead of the bank holiday weekend, a busy trading period for home furnishing retailers often marked by heavy sales promotions.
OFT director Gaucho Rasmussen said: "OFT research has found that reference pricing can mislead consumers into thinking the item they have bought is of higher value and quality, pressure them to buy there and then so they don't 'miss out' on the deal and also impair their judgment, 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.
"This bank holiday sale season we would recommend that consumers ask sales staff when and for how long the reference price was used and also how many sales they achieved at this price. This will help them to determine whether they are getting a good deal."
10 consumer rights you should know
OFT warning on 'misleading prices'
The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.
This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.
Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".
Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.
If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.
If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.
After this point, you can only really expect an exchange, repair or part-refund.
The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).
Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.
Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.
Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.
You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.
The FOS settles disputes between financial companies such as banks and consumers.
If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.
The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.
Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.
They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.
What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.
You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.
Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.
They cannot, for example, enter your home and take your possessions in lieu of payment.
In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.
Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.
You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.
You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.
We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.
In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.
Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.