New Zealand Law Society - Mobile traders fined nearly $900,000 in total

Mobile traders fined nearly $900,000 in total

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Two mobile traders have been fined a total of more than $183,000 and have been ordered to return nearly $71,000 in fees to their customers.

The sentences bring to just under $882,000 the total fines imposed by the courts so far in the Commerce Commission’s prosecutions against mobile traders since the release of the Commission’s Mobile Trader 2014/15 report.

“Thirteen prosecutions are now completed or before the courts, and the growing total in fines shows the seriousness with which the courts and the Commission regard this sort of offending,” says Commissioner Anna Rawlings.

Budget Warehouse Ltd

Budget Warehouse Ltd was fined $100,000 in the Auckland District Court, after pleading guilty to 18 charges relating to its customer contracts. The charges were under the Credit Contracts and Consumer Finance Act 2003 (CCCF Act) and the Fair Trading Act 1986.

The Court also ordered that $33,419 in fees must be returned to customers.

Budget Warehouse is a Manukau-based truck shop which operated five trucks in the Auckland and Hamilton regions, selling household goods on credit.

The company failed to disclose the required information in its contract documents, including its full contact details and an accurate statement of the customer’s right to cancel. Many contracts failed to accurately disclose payment details, including the total number and amount of payments, and the date of the first payment. In total at least eight items of required information were either missing or inaccurate.

Budget Warehouse’s contract documents also misled customers about delivery guarantees and what its liability was for loss or damages caused by the products they sold.

In sentencing, Judge Down said the offending involved a high degree of negligence, and “it is not surprising that the Commerce Commission seeks to send out a strong message through this sentencing exercise to other would-be traders of this type.”

Best Buy Ltd

Best Buy Ltd was fined nearly $83,400, also in the Auckland District Court, on 16 charges under the CCCF Act relating to its credit contracts. Best Buy’s contracts were unclear and left out important information.

The Court also ordered that $37,180 in fees be returned by Best Buy to its customers.

Best Buy operated a mobile trader business in Auckland and North Island towns. The charges covered the period from 6 June 2015 to 28 April 2016.

“Best Buy used two different contracts in that period, and in both versions they failed to include information required under the CCCF Act,” says Ms Rawlings.

Best Buy’s contracts failed to disclose important information such as accurate payment details, and the right of the customer to apply for relief on grounds of unforeseen hardship.

The first contract version was also likely to mislead customers into wrongly thinking that Best Buy had a right to repossess the goods being purchased.

In sentencing, Judge Gibson said Best Buy’s failures were “widespread and systemic” with a “high degree of negligence.”

“The defendant made a choice, for financial reasons, not to seek legal advice,” he said, and “that was a fault that very clearly was negligent and contributed significantly to the offending.”

Ms Rawlings says the judge referred to systemic non-compliance in the mobile trader industry. The Commission urges traders to consider recent prosecutions, and to ensure their contracts comply with the law.

There is information available in the Consumer Credit and Fair Trading sections of the Commission’s website to assist creditors with their obligations.

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