Mobile trader Sales Concepts Limited (Sales Concepts) has pleaded guilty to ten charges in the Auckland District Court, brought by the Commerce Commission under the Fair Trading Act 1986 (FTA) for misleading consumers.
Sales Concepts is an Auckland-based mobile trader which sells a range of electronic goods, including phones, tablets and speakers, to consumers door-to-door using catalogues and also online.
The North Island door-to-door reseller made misrepresentations to consumers between October and December 2015, that ‘Christmas Deal Bundles’ - a package of up to seven electronic goods - would be delivered by Christmas 2015.
As reported by the industry watchdog, these layby sales were offered to consumers on the basis that as long as they were up to date with payments, the goods would be delivered in time for Christmas.
The Christmas Deal promotion involved the sale of bundles of electronic goods for between $599 and $1,599, with customers paying for them by weekly instalments of between $20 and $50.
In December 2015, the Commission issued Sales Concepts with a “Stop now” letter and subsequently accepted Court Enforceable Undertakings from Sales Concepts to avoid further harm to consumers while the investigation continued.
As part of the undertakings, Sales Concepts were required to contact all customers who had purchased a Christmas bundle, giving them the option to either cancel the contract and receive a full refund, or continue the contract on the basis that all of the goods ordered would be delivered upon payment of the specified number of payments set out in their contract.
Sales Concepts also made misleading representations about the products being made in New Zealand, the total price of the Christmas bundle, the inclusion of a delivery fee and customers’ cancellation and consumer rights.
According to the Commission, the company also failed to comply with the FTA disclosure requirements for uninvited direct sales agreements because a number of the agreements were not dated, had illegible handwritten contractual terms or unclear descriptions of the goods to be provided.