A truck shop that targeted and misled vulnerable consumers has been issued a $330,000 fine and ordered to pay $10,800 in damages to its victims.
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Mobile Shop Limited’s fine is the biggest handed down so far following a Commerce Commission investigation into illegal practices by mobile traders.
Of the 13 traders prosecuted so far, Mobile Shop’s contract was the least compliant, Commissioner Anna Rawlings said.
“All of Mobile Shop’s contracts lacked basic information such as the number of payments and an accurate statement about cancellation rights,” Ms Rawlings said.
“Most sample contracts viewed by the commission also failed to state the payment amount and when the first payment was due.
“The wording was confusing and error-ridden and the contracts were in small font, making them difficult to read.”
Mobile Shop’s offending covered more than 5000 consumer contracts signed between October 2015 and September 2016. The contracts had an estimated total value of $1 million.
We’ve been calling for enforcement action against mobile traders breaching consumer laws and for door-to-door sales rules to be strengthened to give consumers better protection against these traders.
One mobile trader contract we looked at in our 2015 investigation charged $34.99 for milk powder, $39.95 for cereal and $49.95 for a rubbish bag pack.
The commission’s 2015 report on the industry identified widespread non-compliance with consumer laws.
Ms Rawlings said while the Mobile Shop prosecution was the last from that project, it was not the end of the enforcement work.
“We have a number of investigations open and we will continue to take appropriate enforcement action against traders which fail to meet their legal obligations to their customers,” she said.
“Our focus is on improving trader compliance with consumer laws and it’s our observation that compliance is improving. Traders are coming back to us with new contracts and they are generally better.”
Eighteen of the 32 businesses listed in the commission report have since stopped trading or left the market.
Fines of nearly $1.6 million have been handed down to mobile traders so far, and one mobile trader received a two-year prison sentence.