HelloFresh pleads guilty to five charges after ‘subscription traps’ tricked customers

HelloFresh was charged for its misleading conduct and 'subscription trap' behaviour. Photo / File

Meal-kit delivery company HelloFresh has pleaded guilty to five charges of misleading customers.

The Commerce Commission said the company misled consumers in cold calls used to “re-activate” those who had cancelled the food delivery service.

In March the regulator filed criminal charges against HelloFresh New Zealand.

At Auckland District Court today before Judge Kate Davenport KC, the company admitted breaching the Fair Trading Act.

Specifically, it breached a section which outlawed misleading conduct in relation to services.

HelloFresh will be sentenced on October 16 for the “subscription trap” behaviour.

The Commerce Commission must file submissions on sentencing by 5pm on September 22 and HelloFresh must file by 5pm on October 7.

The charges related to conduct between February 2022 and July 2023.

Previous HelloFresh customers were offered a discount voucher without it being made clear that accepting the voucher would reactivate their subscription.

“Taking payment for services customers aren’t aware they’re buying or have not agreed to purchase is unacceptable behaviour,” the commission’s deputy chair Anne Callinan said when charges were filed.

“In these calls, it was not made clear to some customers that if they accepted a discount voucher offered, their subscription would be reactivated, and their bank account would be debited.”

The commission said it was prioritising action against illegal online sales conduct.

“This includes subscription traps, which come in many forms and include situations where consumers are misled into signing up for a paid subscription without knowing.”

The charges were initially filed at Wellington District Court.

The commission said it investigated HelloFresh after receiving many complaints about its sign-up, cancellation, and reactivation processes.

The Herald in 2023 heard from Fiona Goodin, who complained of being bamboozled with obnoxious calls from HelloFresh soon after Cyclone Gabrielle.

HelloFresh at the time said it was providing more training to its teams to ensure they did not pester people in cyclone-affected areas.

Consumer NZ in early 2023 said it received numerous complaints about HelloFresh, with some customers angry at being charged for meal kit boxes they opted to skip.

Australia’s Consumer Policy Research Centre said three out of four Australians reported having a negative experience when trying to cancel a subscription.

It urged businesses to avoid practices that rely on tricking customers or making money from customer inertia or forgetfulness.

John Weekes is a business journalist mostly covering aviation and courts. He has previously covered consumer affairs, crime, politics and courts.