'Reckless' trader fined $50,000 for misleading the public

By Gemma Hartley

The company, which is no longer trading, sold smartphones, televisions and computers door to door on credit throughout the North Island. Photo / iStock
The company, which is no longer trading, sold smartphones, televisions and computers door to door on credit throughout the North Island. Photo / iStock

A mobile trader who deceived hundreds of Kiwis has today been fined $50,000 by an Auckland court.

Customers of Flexi Buy Limited who purchased goods but never received them will be awarded almost $4000 in damages.

The company, which is no longer trading, sold smartphones, televisions and computers door to door on credit throughout the North Island.

The Commerce Commission launched an investigation a year ago after complaints were raised by customers who handed over money for products they never received.

Today the Auckland District Court fined the "reckless" company $50,000 for misleading the public -- the first of three cases to go before a judge.

Flexi Buy was charged with describing some key information in a misleading or deceptive way under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

Other charges included 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.

In sentencing, 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."

The dodgy trader has been ordered to pay $3408 to out-of-pocket Kiwis in areas ranging from Whangarei, Murupara, Hastings and Porirua.

Flexi Buy was named in a mobile trader report published by the Commerce Commission in August last year after reports of foul play.

Following a year-long investigation into the industry they discovered 31 of the 32 mobile traders identified did not comply with all of their obligations under the CCCFA.

"This is also the first conviction of a mobile trader following our report on the industry last year", said Ms Rawlings.

"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."

In September last year, the Commission filed charges under the Crimes Act 1961 and the Fair Trading Act 1986, against Vikram Mehta, a former director of Flexi Buy Limited.

The charges allege he obtained money from customers by deception and accepted payment from customers without intending to supply the goods they contracted to purchase.

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

ENDS

[NZME-NZG-NZC]

-NZH

- NZ Herald

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