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8 September 2013

Door-to-door sales investigated

Door-to-door goods company investigated by the Commerce Commission.

Door-to-door goods company investigated by the Commerce Commission.

Layaway Depot, a company selling household goods door-to-door, is being investigated by the Commerce Commission for possible breaches of both the Fair Trading Act and the Credit Contracts and Consumer Finance Act.

We've recently dealt with a complaint involving a Layaway Depot customer who was sold a lawnmower and line trimmer on credit for more than $2000. We found the retail price of these products was well under half this amount.

We were also concerned the customer wasn't given clear information about the amount she had to pay or about her right to cancel the deal. Consumers buying on credit must be given this information.

When we got in touch with Layaway Depot, it agreed to refund the $500 the customer had paid towards the purchase. She had been refunded $300 initially but the company had retained $200 in cancellation fees and other charges.

Layaway Depot said its representatives supply "a full set of terms and conditions [and] a cancellation form" to customers but told us the sales agent involved in this case was no longer employed by the company.

Layaway Depot was registered with the Companies Office in 2011. In the past few months, it's been advertising for door-to-door sales staff in various centres including Hamilton, Gisborne, Palmerston North and Rotorua.

The Financial Markets Authority told us it was looking into whether Layaway Depot needed to be registered under the Financial Service Providers Act. Companies selling goods on credit are generally required to be registered and must belong to a dispute resolution scheme.

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