Chrisco faces Fair Trading Act court date

Photo / Wairarapa Times-Age

Christmas hamper provider Chrisco is facing a likely court appearance for alleged breaches of the Fair Trading Act.

The Commerce Commission has alleged that Chrisco's Hampers Limited has made misleading representations by unlawfully charging cancellation fees under the Layby Sales Act 1971.

On Chrisco's website it says cancellation fees on most of its layby orders will incur a charge of 20 per cent of the instalments made up to 90 days before the final payment is due.

That figure increases to 50 per cent within 90 days prior to the final payment due date.

Under the Layby Sales Act, sellers are entitled to charge for their costs relating specifically to the sale of the goods but not the wholesale price of the items.

Commerce Commission enforcement manager Graham Gill said it had instructed Crown solicitor Meredith Connell to lay charges against Chrisco, which calls itself "the leading Christmas hamper provider in the country".

"We will be having some discussions about the appropriate number of charges," he said.

Mangere Budgeting and Family Support Service Daryl Evans said he was pleased with the pending charges having helped at least 40 families to cancel their layby contracts with Chrisco in the past year.

He said consumers were entitled to accurate information under the Credit Contracts and Consumer Finance Act but he believed they weren't getting this from Chrisco

"Often the terms in these contracts are misleading, people are not getting true and accurate information in terms of their cancellations," he said.

"If you can prove hardship then you should be entitled to be given certainly accurate information and be allowed to get out with the least bit of financial difficulty and Chrisco don't seem to be coming to the party on it."

A Chrisco spokeswoman said the company had not seen any details on the pending charges so would not comment on them.

But she said Chrisco had co-operated with the commission during its two-year investigation and recently wanted to meet with it to discuss the issues but the offer was declined.'

The spokeswoman said the percentage of customers who cancelled their layby contracts was "very small" and Chrisco worked with customers to allow them to retain their order at a lesser amount if they needed to.

Asked if its charges for quitting layby schemes were reasonable the spokeswoman said its cancellation policy related to the costs the company incurred.

"And we believe it complies fully with all aspects of New Zealand law, and that we treat our customers fairly and properly."

A 2008 Herald on Sunday investigation found that goods purchased in a Chrisco hamper cost 24 per cent to 38 per cent more than if they were bought in the supermarket.