Interest breach costs $3500

By CHRIS DANIELS

An Auckland bed retailer has joined a growing list of furniture shops stung by the Commerce Commission for breaking fair trading laws.

Waitemata Back Care Beds and Waterbeds has been fined $3500 in the Waitakere District Court after it admitted breaking the law when advertising a "zero per cent interest-free fiesta" that was not genuinely interest-free.

It was not genuine, said the commission, because compulsory additional costs were not disclosed in the advertising.

"If customers pay more for hire purchase than the cash price then it is not interest-free," said the commission chairman, John Belgrave.

"Retailers can impose fees and interest but they must then disclose them clearly and accurately, and must not call it an "interest-free offer."

The commission has targeted furniture retailers recently, with Waitemata Back Care Beds and Waterbeds the third to be prosecuted in the past month.

The company, which trades as Waitemata Back Care Beds and Beds and Beds, has seven franchised stores in Auckland.

The owner of the franchiser company, Mike Erskine, said the advertising was not intended to mislead people, had affected only a couple of customers and would not happen again.

The advertising had not included a $40 booking fee to set up the hire purchase agreement. Now, when such a deal was offered, the shop would pay the booking fee for the customer to the finance company.

A Napier shop was fined $8000 for describing pine furniture as solid rimu and an Upper Hutt retailer was fined $15,000 for doing the same thing.

The commission's fair trading manager, Rachel Leamy, said furniture retailers were a particular problem.

The law was clear and was not new.