Christmas hamper company Chrisco has been pulled up by the Australian Federal Court for a term in its 2014 lay-by contract that allowed the company to keep taking payments from a customer’s account after they’d paid for their order.
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The Commerce Commission confirmed it’s reviewing Chrisco’s contract here in light of the judgement. The company has used similar terms and conditions on both sides of the Tasman.
Chrisco Australia defended its contract in court, arguing some of its customers were “unsophisticated” and it was an advantage for them to have money removed from their accounts for future purchases. The company required customers to “opt out” of having further payments deducted after they’d paid for their order.
The Federal Court rejected Chrisco’s argument, ruling the term was unfair and caused a significant imbalance in the parties’ rights and obligations.
The company also received a NZ$222,000 penalty for claiming customers couldn’t cancel a lay-by agreement after making their final payment. Australian and New Zealand consumer laws allows consumers to cancel a lay-by at any time prior to delivery of the goods.