A Waikato mobile trader with about 50 customers was breaking the law, says its liquidator.
The shareholders of Appliance City last week appointed liquidator Pritesh Patel, who this week said he has decided to cancel any direct credit payments coming into the company's account from its 50-60 customers.
Pratel said in a report filed this week with the Companies Office that the liquidators had been advised that some customers may not have received goods.
"We carried out a due diligence and identified that the company had been trading in non-compliance with relevant legislation," Pratel said. "This investigation is ongoing and if necessary we may need to refer various matters to the Commerce Commission," he said.
The commission last year reviewed the mobile trading sector, which brought in tens of millions of dollars a year for its largest operators.
The regulator said in a report last August that the price of the products the door-to-door traders sold were usually substantially higher than the cash price at a mainstream retailer.
Appliance City was not one of the 32 traders the commission visited for its report.
The commission said mobile traders tended to target lower socio-economic areas and often offered lower-quality goods than mainstream outlets.
Some customers were attracted to mobile traders because they could not obtain credit from a bricks-and-mortar store, and could pay $10 or $20 a week to the truck shops.
We considered that 31 of the 32 mobile traders visited did not, to varying extents, comply with all their obligations under these Acts.
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The regulator visited 32 traders and said its inquiries showed that compliance with the Fair Trading Act and Credit Contracts and Consumer Finance Act was "inadequate across the industry".
"We considered that 31 of the 32 mobile traders visited did not, to varying extents, comply with all of their obligations under these Acts," the commission's August report said.
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