A mobile trader has been sentenced to two years imprisonment in the first jail sentence handed down in a prosecution initiated by the Commerce Commission.

Vikram Mehta, owner of Flexi Buy Limited, was the sole shareholder and director of Flexi Buy during the period of its offending. He was convicted under the Crimes Act 1961 as a party to Flexi Buy's conduct, after taking money from customers without intending to supply the products.

Flexi Buy told customers it would supply the products once a set number of payments were made by the customer, when it knew they would not be, the Commerce Commission says. More than 300 consumer credit contracts were entered into by Flexi Buy between 2012 and 2014, with just nine customers receiving their goods.

Instead, Mehta used Flexi Buy income for his personal use, including at least $22,000 spent during a trip to India in 2013.

In sentencing Mehta in the Auckland District Court, Judge Cunningham ruled out home detention, because of the seriousness of the offending.

“In my view it needs to be a sentence at the top of the hierarchy of sentences to send a message to Mr Mehta and any other persons who seek to, in my words, rip off vulnerable people, that such behaviour that breaches the criminal law will be met with the full force of the criminal law,” Judge Cunningham says.

Commissioner Anna Rawlings says the case, which is part of an ongoing crackdown on mobile traders, was ‘a particularly serious one'.

“The Crimes Act charges are consistent with other cases we have pursued where traders have failed to supply goods or services that their customers have paid for,” Rawlings says.

“All traders need to know the Commission can and will take this action where it's justified,” she adds.

Rawlings says the sentence sends a strong message that there can be serious consequences for traders who take customers' money without delivering the promised goods.

Flexi Buy was fined $50,000 in February 2017 for breaching the Credit Contracts and Consumer Finance Act 2003 by failing to provide its customers with adequate disclosure of key information about credit contracts. It was also ordered to pay $3408 in damaged to affected customers.

The Commerce Commission prosecuted 11 mobile traders in 2016 following a Mobile Trader 2014/2015 report which found wide-spread compliance issues. Twelve investigations into mobile traders are continuing.

Mehta has indicated he intends to appeal. Flexi Buy stopped trading after the Commission commenced its investigation.