scales and gavel on table

Liquidated mobile trader fined more than $100,000

A mobile trader who was seriously ripping off its customers has been fined $114,000, despite going into liquidation last year.

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Appenture Marketing was fined $114,000 in the Auckland District Court for misleading consumers and not providing them with key contract information.

Appenture was a mobile retailer that operated throughout the North Island. It offered products, such as electronics, door-to-door on credit at significantly higher prices than standard stores. For example, in March 2016 it was selling an Apple iPhone 6S for $4440 while the same model was on offer at a major retailer at the same time for $1399.

The trader was sentenced on 18 charges under the Fair Trading Act (FTA), and 6 charges under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

“Appenture represented in its terms and conditions it wasn’t liable for delivery delays and customers would not be able to cancel because of delays. That’s misleading because the CGA [Consumer Guarantees Act] guarantees that goods will be received within the agreed time, and the trader could not contract out of its obligations under the CGA,” Ms Rawlings said.

Appenture also misled customers by representing that if items purchased were unavailable it could substitute them, and that it could charge default interest on the unpaid balance of a contract after the goods had been repossessed and sold.

“The CCCFA is clear that creditors cannot charge interest on the outstanding balance after goods have been repossessed and sold,” Ms Rawlings said.

Appenture’s contracts didn’t disclose key information to consumers, such as the correct initial unpaid balance, the final payment amount, and the number of payments to be made.

“By failing to include a $40 application fee in the calculations, Appenture did not provide accurate key information to its customers. It also failed to tell customers when fees and charges would be payable,” Ms Rawlings said.

“This trader failed to comply with its obligations under the CCCFA and the FTA and deprived its customers of the information and legal protections that the law provides.”

The mobile trader was charged in December 2016 but went into liquidation in April 2017. The Commerce Commission sought consent from the High Court to continue the prosecution. It wanted to make sure a clear deterrence signal was sent.

“In the commission’s view there was genuine public interest in pursuing this prosecution despite the liquidation, as conviction may lead to the return of funds to consumers. It’s also important for deterrence,” Commissioner Anna Rawlings said.

Judge Mary-Beth Sharp said it was unlikely the fines would be met. However, she said “this case must have the effect of denouncing the conduct and penalising it in such a way that others in this industry will think twice before offending”.

Judge Sharp ordered Appenture return all costs of borrowing incurred by those who entered contracts between June 2015 and April 2016, either by refund or credit to accounts.

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