Truck shop Bestdeals pleads guilty as regulator continues crackdown on mobile traders

Tuesday 18th October 2016

Truck shop operator Bestdeals 4 You has pleaded guilty to 19 charges of breaching the Fair Trading Act as well as the Credit Contracts and Consumer Finance Act in Auckland's District Court.

Bestdeals is the ninth mobile trader to be prosecuted since the Commerce Commission’s investigation into the industry last year. It will be sentenced on Dec. 16, the Commerce Commission said in a statement.

The company, which operates under the name Easylayby, operates a mobile business selling door-to-door in Auckland, Whangarei, and Hastings. It also operates Super Mobile, a store in South Auckland which offers layby sales.

Bestdeals breached the Fair Trading Act by failing to comply with disclosure requirements for layby sales agreements, particularly by not providing customers with a copy of the terms and conditions of those agreements, the regulator said. It breached the CCCF Act by not telling consumers they had the right to cancel the contract, the right to apply for relief in the case of unforeseen hardship, and not giving details of the number of payments they had to make.

The Commerce Commission has thirteen open investigations into mobile traders, while the District Court has imposed fines of about $510,000 on five mobile traders sentenced so far this year.

Its mobile trader report published last August after a year-long investigation into the industry found that 31 out of 32 mobile traders identified didn’t comply with their legal obligations. The main problems were a lack of disclosure to customers entering into contracts and a failure to be registered as financial service providers.

The regulator initiated the investigation after a big increase in consumer complaints about how the truck shops operated, with anecdotal evidence the most vulnerable members of the community were being given confusing or deceptive information by mobile traders, particularly over the total price of their purchase.

Despite the total price of items being sometimes double that in other stores, customers were attracted by the convenience of the truck shops, the low weekly or fortnightly payments, and the “easy” credit as many traders don’t bother with credit checks, the report said.

Commissioner Anna Rawlings has said changes to the law which took effect last year will enable the regulator to seek higher penalties for breaches of the CCCF Act than were available to the court in its first prosecution of Flexi Buy, which was fined $50,000 by the Auckland District Court with a further $3,408 awarded in damages to affected customers in March.

BusinessDesk.co.nz

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