Sales Concepts LTD fined $145k for 'obvious misrepresentation'

  • News
  • March 15, 2017
Sales Concepts LTD fined $145k for 'obvious misrepresentation'

Mobile trader Sales Concepts were fined $145k after misrepresentation and dodgy contracts surrounding Christmas bundle payment and delivery service. 

Mobile trader Sales Concepts pleaded guilty to ten charges against the Fair Trading Act (1986) resulting in a $145,000 fine.

The company was sentenced by Judge Sinclair before the North Shore District Court on ten accounts against the act, directly relating to obvious misrepresentations when obtaining sales.

The charges came after a misleading Christmas promotion that saw customers spending between $599 and $1,500 for electronic bundles that were promised to be delivered before Christmas, but were not.

Judge Sinclair states the company had only intended to make a profit with little regard to the impact of the customers around the already financially stressful Christmas period.

“I cannot accept the submission that the defendant company was not aware of the representations,” she said. “This was not a large company – it cannot abdicate responsibility and hide behind the actions of a reported few aberrant sales staff.”

Sales Concept pleaded guilty to the Auckland District Court late September of last year.

Sales Concepts also made representations surrounding the products being made in New Zealand, the total price of the Christmas bundle, the inclusion of a delivery fee and customers’ cancellation rights.

Anna Rawlings, commerce commissioner, said Sales Concepts’ staff had misled its customers in several ways.

“Traders are responsible for what their employees do. Frontline sales staff need to be properly trained to understand their obligations under consumer laws. The incentive to make a sale must never compromise the trader’s obligation to provide clear and truthful information to its customers.”

“Sales Concepts stopped its misrepresentations and agreed to refund its customers after the Commission intervened in December 2015. But its Christmas sales practices had already caused confusion and distress at a time of year when many people come under financial pressure,” Rawlings said.

Sales Concepts also failed to comply with the FTA disclosure requirements for uninvited direct sales agreements because several of the agreements were not dated, had illegible handwritten contractual terms or unclear descriptions of the goods to be provided.

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