High Court legal proceedings have been filed against a door-to-door retailer by the Commerce Commission, which claims unfair contract terms and cancellation fees.

In a statement, the Commission said it has a civil case against Ace Marketing Limited (Ace) over allegations of breaches of the Fair Trading Act 1986 (FTA) and the Credit Contracts and Consumer Finance Act 2003 (CCCF Act).

The Hamilton-based company sold consumer goods – mostly consumer electronics products – via door-to-door sales agents.

The Commission alleges between April 1, 2016, and August 31, 2018, Ace entered into about 4100 contracts with customers.

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Customers, however, did not receive products until they had made a specified number of weekly payments to Ace, the Commission said, and all versions of Ace's contract contained terms stating delivery of products would be delayed if customers missed scheduled payments.

The Commission's case claims Ace breached the lender responsibility principles under the CCCF Act.

It allegedly did so by failing to assist borrowers to reach an informed decision because the clauses that set out the delay in delivery when payments were missed were not plainly expressed, were likely to be misleading, deceptive or confusing, and were oppressive.

It is also claimed the contract contained unfair contract terms, as the delayed delivery provisions created a significant imbalance in the parties' rights.

The cancellation fees, the Commission alleged, which were a percentage of either the purchase price of the goods or the total price of the contract, were also unreasonable.

The Commission seeks declarations from the High Court that Ace's conduct breached the FTA and/or the CCCF Act and the clauses in its contracts setting out the length of delay in delivery when payments were missed were unfair contract terms.

It also seeks injunctions preventing Ace from providing consumer credit until its contracts are amended to comply with the CCCF Act, from unreasonably deferring delivery of goods, and from charging unreasonable fees.

And further wants refunds to customers of unreasonable cancellation fees, and costs.

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The Commission would not comment further on the proceeding now that is before the court.

Ace told the Herald it would not comment on the case while it was before the court.

In 2016, Ace was fined $150,000 while another Cambridge-based mobile trader Smart Shop Limited was fined $135,000 by the Auckland District Court.

Ace had pleaded guilty to 28 charges, including for failing to provide customers with key information about loans required by the CCCF Act. It also admitted to breaching the FTA by misleading customers about their rights.

As part of the earlier court case, it was further ordered to refund customer fees relating to more than 1500 contracts.

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