The Commerce Commission is investigating two mobile traders and has told 29 others to change the way they operate after a year-long project.
The commission identified 32 mobile traders, also known as truck shops, operating around the country. Generally they sell in lower socio-economic areas to customers who might struggle to obtain credit through mainstream methods.
The commission’s report said the goods were usually sold on credit or layby and at significantly higher prices than comparable goods in retail outlets. The commission found a mobile trader selling a PlayStation 3 for $1550, while pricespy.co.nz listed the price in stores from $390 to $530.
From a sample of 16 mobile traders, annual revenue from sales ranged from about $150,000 to $7 million. One group of three related companies had revenue of nearly $22 million, the report said. Some of the more established traders had over 70 trucks and more than 35,000 customers. They primarily sell clothing, bedding, perfumes and toys.
Only one trader was meeting its legal obligations. Issues identified with the 31 others included the traders making it difficult for customers to cancel agreements, continuing to take payments after an item was paid for and making confusing representations. Commissioner Anna Rawlings said the commission would be revisiting the traders who had been given compliance advice in the coming months to make sure they had made changes and were now complying with the law.
“In the event they have not, we will take further enforcement action, including criminal and civil proceedings where appropriate,” Ms Rawlings said.
The commission’s findings mirror the results of research Consumer published in April this year. Our report found mobile trucks selling goods at highly inflated prices, including a packet of cereal for $40.