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First mobile trader sentenced following Commission's mobile trader report

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A New Zealand based retailer, Flexi Buy has been fined $50,000 in the Auckland District Court. A further $3,408 was awarded in damages to affected customers.

While no longer trading, Flexi Buy primarily sold electronic goods such as smartphones, televisions and computers door-to-door.

Flexi Buy is one of two companies the Commerce Commission identified as being under continued investigation in a report on the mobile trader industry released last year.

Flexi Buy was charged under the Credit Contracts and Consumer
Finance Act 2003 (CCCFA) for failing to provide its customers with adequate disclosure of key information about their credit contracts, such as the frequency or amount of payments, default interest and the debtors' cancellation rights. The company was also charged with describing some key information in a misleading or deceptive way.

In sentencing Flexi Buy, Judge Field said that the company had been "entirely reckless in its dealings with members of the public."

Commissioner Anna Rawlings said, "Clear and accurate disclosure is essential so that consumers can understand the deal they are agreeing to and what their rights are. It is notable that in this case the judge indicated that significant harm and stress no doubt occurred to debtors as they tried to understand their rights. The Commission will continue to take action against credit providers where disclosure does not meet the required standard."

"This is also the first conviction of a mobile trader following our report on the industry last year. We are continuing to review mobile trader compliance with the range of laws that we enforce and we will bring further prosecutions where we discover non-compliance. Changes to the law which took effect last year will also enable us to seek higher penalties for breaches of the CCCFA than were available to the Court in Flexi Buy's case."

The Commission currently has three other cases before the courts involving mobile traders. Investigations into four others are ongoing.

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Tags: commerce commission  New Zealand