Two mobile traders have been slapped with record fines after being taken to court by the Commerce Commission.
The Commission says these are the two highest penalties yet imposed on mobile traders it has taken to court as it continues its work to improve compliance in the mobile trader industry.
The Auckland District Court fined Ace Marketing Limited $150,000 and Smart Shop Limited (which traded as SmartStore) $125,000 for a number of breaches of the Credit Contracts and Consumer Finance Act 2003 (CCFA) and the Fair Trading Act 1986 (FTA).
Hamilton-based Ace Marketing pleaded guilty to 28 charges, including failing to provide customers with key information about their loans and misleading customers about their rights.
SmartStore, which is based in Cambridge, pleaded guilty to 11 charges for failing to provide the disclosure required by the CCFA and for breaching the FTA by making misleading statements in its loan contracts and failing to provide information about its extended warranty agreements.
In sentencing SmartStore, Judge Robert Ronanye said the company "breathtakingly overpriced everyday items". He also pointed out the vulnerability of SmartStore's customers, saying "the power, sophistication and commercial nous was with the defendant, not the customer".
As well as the fine, Ace Marketing was also ordered to refund customer fees relating to over 1,500 contracts. When sentencing Ace Marketing, Judge Robert Collins said "it is very important that such traders comply with consumer protection legislation".
After the sentences were handed down, the Commerce Commission said the law was very clear about the type of information that needs to be provided to consumers.
"It is crucial that consumers understand what they are signing up to when they buy something on credit and that they are given accurate information about their rights when things go wrong," says Commissioner Anna Rawlings.
Ms Rawlings says courts have imposed five mobile trader sentences in 2016 and the Commerce Commission has a number of other mobile trader cases before the courts and under investigation.