Flexi Buy has been fined $50,000 plus damages following the Commerce Commission's report looking into the mobile trader industry.
The mobile trader is one of two companies the Commission identified as being under continued investigation.
Flexi Buy previously sold electronic and household goods door to door on credit. It is no longer trading.
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.
It was ordered to pay $3408 in damages to affected customers.
In sentencing Flexi Buy, Judge Field says that the company had been “entirely reckless in its dealings with members of the public”.
Commissioner Anna Rawlings says, “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,” she says.
“The Commission will continue to take action against credit providers where disclosure does not meet the required standard.
This is the first conviction of a mobile trader following the Commerce Commission 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,” says Rawlings.
“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.
Flexi Buy primarily sold electronic goods such as smartphones, televisions and computers door-to-door. The goods were sold in a number of areas around the North Island including South Auckland, Whangarei, Tokoroa, Murupara, Porirua, Kaikohe, Hastings and Gisborne.
The Commission currently has three other cases before the courts involving mobile traders. Investigations into four others are ongoing.