Technology and appliance retailer Noel Leeming has been fined $200,000 for misleading consumers about their rights to return faulty goods after several complaints led to an investigation by the Commerce Commission.
The company, owned by The Warehouse Group Limited, earlier pleaded guilty to eight charges under the Fair Trading Act.
The Commerce Commission filed the charges in April after an investigation into customer complaints for the right to seek remedies for faulty goods from Noel Leeming and not the manufacturer, the right to a refund for faulty products and the right to a replacement for a faulty product.
Each charge related to a different complaint at several Noel Leeming stores between September 2015 and January 2017.
Today, the company was sentenced in the Auckland District Court by Judge Nicola Mathers.
Some of Noel Leeming's false misrepresentations included the claims faulty iPhone products had to be negotiated with Apple directly, and the Consumer Guarantees Act "is not effective for" Noel Leeming.
A consumer was also told they had to contact Microsoft about a faulty product, while another was falsely informed Noel Leeming could repair a fridge as many times as it liked and then told he could only get a store credit to purchase another fridge.
Further lies included telling a consumer mobile phones could only be replaced within 14 days, and a new phone could only be obtained if a fault occured three times.
Whangārei baker Adam Henson, 23, was one of the customers misled by Noel Leeming.
He purchased a laptop which he was told could play video games, he said.
However, the computer could not so he returned it.
But the second computer had the same problems and after a third, he was told he could no longer get a refund.
"What I got in return? Disruptions, anxiety, stress," he said.
Henson said he was made to feel like the "bad guy" and was inconveniencing Noel Leeming staff.
"I felt robbed," he said.
Countless hours were spent calling the company's head office only to be told "the next person is the one to talk to".
Finally a Noel Leeming staffer told him: "No point in you calling, stop calling. Goodbye."
"I was shocked," Henson said, who spent years paying off his debt to Noel Leeming.
Counsel for the Commerce Commission, Nick Flanagan, told the court Noel Leeming's breaches spread throughout the organisation.
It was also the first case of its kind and the Noel Leeming staff had led a direct and significant departure from the truth, he said.
Flanagan also argued Noel Leeming's breaches were "not simply eight isolated incidents" but something "disseminated through the business".
Michael Heron QC, acting for Noel Leeming, said the large organisation was making efforts to comply.
He said the "misjudgments were unacceptable" and Noel Leeming takes responsibility.
His primary submission, however, was the company should be sentenced solely on the charges before the court.
Judge Mathers said Flanagan's submission the offending was more than just eight examples may have been correct, but added "I do not consider I can speculate".
The Commission said since 2007 it had issued warnings or compliance advice letters to Noel Leeming on three occasions.
Commissioner Anna Rawlings said the offending was not isolated or one-off conduct.
"Consumers complained to Noel Leeming about products and were entitled to have their complaints treated seriously, investigated properly and remedied where appropriate. Instead they were misled – sometimes repeatedly – about their rights under the law, at a moment when it really mattered to consumers that their legal rights were honoured."
She said the statements made to the customers were "simply wrong".
"A supplier cannot refuse to deal with its customers and refer them to the manufacturer."
After the charges were laid, a spokesperson for Noel Leeming said: "We're disappointed by the Commission's enforcement decision, which came without the opportunity to investigate or discuss the complaints.
"We take our compliance responsibilities seriously and we want to do the right thing by our customers."