Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Truck 'shops' warned on credit law

Commission warns truck 'shops' may be breaching credit law

The Commerce Commission has warned four companies operating mobile shops in the North Island that they may be breaching the Credit Contracts and Consumer Finance Act (CCCF Act) by not disclosing important information to customers.

The Commission has issued warnings to Lync NZ Limited, Suny Pacific International Limited, Impact Door to Door Limited and The Good Guys Limited. They operate mobile shops in areas including south Auckland, Northland, Bay of Plenty and Waikato.

Mobile shops are trucks which are fitted out with a range of products, including clothing, bedding, furniture, electrical appliances and food, which allow people to shop from home. Customers can pay for their purchases using credit provided by the mobile shop. Customers who purchase items on credit are required to sign up to regular automatic payments or direct debits.

The four companies failed to disclose important information to customers buying goods on credit, such as credit fees and charges, how and when payments are to be made, default fees, annual interest rates and how they are calculated. They also failed to provide customers with details of security interests taken over people's assets, and to inform customers of their rights, including the right to cancel and the right to repay early.

"These contracts are totally deficient," says Fair Trading Manager Graham Gill. "If businesses are going to offer goods on credit, then they have to comply with the CCCF Act. If they don't provide adequate disclosure to customers then the contracts can't actually be enforced.

"Furthermore, if they make representations that the contracts can be enforced, or attempt to enforce them, they are likely to be in breach of the Fair Trading Act."

While businesses need to be aware of their obligations under the law, customers also need to know their rights, Mr Gill added. "Disclosure of information is the cornerstone of the CCCF Act. It allows customers to be fully informed about the true cost of credit, to compare competing credit offers and make a decision as to whether they purchase the goods with cash or on credit."

"Our advice to anyone thinking of entering into a credit arrangement with mobile shops is to obtain sufficient information so they can so they can compare prices and services and be aware of their full obligations. Having that information will also allow them to shop around and find the best deal."

Background

CCCF Act Credit Contracts and Consumer Finance Act - A general guide for the credit industry can be downloaded from the Commerce Commission's web site www.comcom.govt.nz

Penalties The court may order a creditor to pay statutory damages to customers where they have failed to disclose adequately under the CCCF Act and can also impose fines of up to $30,000 per offence under the CCCF Act and up to $200,000 under the Fair Trading Act.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news