Christmas hamper company Chrisco has pleaded guilty to charges under the Fair Trading Act relating to its fees for cancelling orders.
Commerce Commission enforcement manager Graham Gill said yesterday that the company pleaded guilty on October 12, almost a year after the commission started legal action, and would appear in the Manukau District Court for sentencing on February 1.
"The reason it has taken us a long time is that we have been in discussions with them in which they have addressed or rectified what they had been doing and agreed to plead guilty to certain charges," he said.
The commission alleged last year that the company had made misleading representations by unlawfully charging cancellation fees proscribed under the Layby Sales Act 1971.
The company's website stated at the time that cancellation fees on most of its layby orders would incur a charge of 20 per cent of the payments made up to 90 days before the final payment was due, or 50 per cent of the payments made if the order was cancelled in the final 90 days.
A Chrisco spokeswoman said the company had been working with the commission on the issue for nearly three years.
"During the commission's investigations we reviewed and changed our cancellation fee policy. We also refunded the very small number of customers affected early this year," she said.
"The interpretation of the relevant law is a very grey area. However the commission's decision now gives clarification going forward."
Mangere Budgeting Service chief executive Darryl Evans, who complained to the commission about the company, said his agency had helped well over 100 people cancel their orders for Chrisco hampers because they could not afford them.
"Quite a lot were hit by huge cancellation fees - not huge by most people's standards, but something like $50 which is huge for our clients," he said. "In most cases when we appealed the amount, they reduced it."
Mr Evans said Chrisco charged up to $150 to $200 more for its hampers than the individual items cost in low-priced supermarkets.
A Consumer NZ survey in March found that the items in Chrisco's "traditional" hamper could be bought online from Woolworths for $327.84 - about $83 less than Chrisco's price of $10.53 a week for 39 weeks ($410.67).
Chrisco's website says: "The price you pay includes the cost of collecting your payments (charged to us by our bank), special packing, delivery, GST and is fixed for the year. "
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