Water filter boss denies fear tactics

Businessman Phillip John Smart leaves the Auckland District Court where he is facing charges for misrepresenting customers buying water filters. Photo / NZ Herald

The director of a water filter company was unaware of the tactics being used to sign up new customers, his lawyer has told a court.

Phillip John Smart, director of Love Springs, has previously denied seven charges of breaching the Fair Trading Act by being party to the misrepresentations.

Auckland District Court was previously told water filter salesmen used fear tactics when they went door-to-door, telling customers tap water could cause leukaemia, cancer, miscarriages and birth defects.

Today, when Smart's hearing resumed, his lawyer Aaron Lloyd said claims chlorine found in tap water could cause cancer were "used broadly'' in the water filtration industry to sell products but he denied his client was aware such claims were being made at Love Springs.

Mr Lloyd said due to Smart's business commitments on both sides of the Tasman, he didn't have enough time to have an intimate knowledge of Love Spring's operations.

Smart's role with the business involved analysing sheets of data and providing morning motivational sessions to team leaders and sales representatives at 5- to 10-minute "impact sessions''.

Smart was "in no way aware'' of such sales tactics being employed by his staff, Mr Lloyd said.

"He was not involved in that level of the business.''

It had never been company policy to use misinformation to sell the product, Mr Lloyd said.

"It's just counterproductive to the business.''

Scare tactics about the dangers of drinking tap water had come from the internet and sales representatives' imaginations, he concluded.

Smart said staff found to be distributing misinformation were either "re-trained, or fired''.

Sales reps needed to focus on the positive, not the negatives of the products to be able to sell them successfully, Smart said.

"You can't scare customers into buying something from you. You've got to build up rapport with them. You can't scare them, it's unprofessional.''.

Commerce Commission prosecutor John Dixon told the Auckland District Court in March that Smart's salesmen told householders tap water contained potentially dangerous germs and chemicals.

Mr Dixon said Smart and his company had previously been convicted in Queensland for five breaches of the Australian Fair Trading Act.

Former Love Springs team leader Anthony Beech told the court in March that he and other salesmen did internet research on tap water before going to poorer Auckland suburbs, because Smart said people there were "less intelligent''.

The hearing continues.