Scam Trader Convicted Of 33 Breaches Of Act

Issued 12 April 2002

Scam Trader Convicted Of 33 Breaches Of Fair Trading Act

Notorious trader Michael Knight was fined $3,000 plus $130 court costs in the Auckland District Court today. He was convicted of a total of 33 breaches of the Fair Trading Act relating to the businesses Budget Imports and Francais Imports Limited.

Judge Hole said the level of the fine bore no resemblance to the enormity of the offending.

“The reality was Michael Knight’s ability to pay was virtually nil and for that reason alone, the fine was a nominal amount,” said Judge Hole. Michael Knight was declared bankrupt last year.

A Commerce Commission investigation into Francais Imports revealed its advertising in March, April and May 2000 – in facsimiled flyers and a television advertorial – misrepresented the availability of Lancôme and Clarins cosmetics, and the price, origin and history of Donnatella Milano brand cosmetics.

Customers who ordered the brands complained of non-delivery, immediate debiting of credit cards, and delivery of Donnatella Milano products rather than the Lancôme or Clarins products they’d ordered. The cosmetic Donnatella Milano, while being represented to be of Italian origin and of higher retail price than Lancôme or Clarins, was in fact made in Auckland specifically for Francais Imports.

Of the 20 charges to which Knight pleaded guilty regarding Francais Imports, 12 were for false representation (s13), six for bait advertising (s19) and two for demanding/accepting payment without intending to supply as ordered (s21).
A similar investigation by the Commission into Budget Imports revealed its print advertising in October and November 2000 – featured in The Christchurch Press, Dominion and New Zealand Herald – misrepresented the availability of adidas shoes, and the model and availability of laptop computers.

The pre-Christmas advertising generated considerable consumer interest. No adidas shoes or laptop computers were delivered to people who had placed orders and made payments, and no refund or substitute goods were offered.

Of the 13 charges, eight were for misleading conduct in relation to goods (s10), four for bait advertising (s19) and one for false representation (s13).

Judge Hole said: “This is a scam. The result is that a lot of people lost money. Michael Knight displays a total absence of remorse, which is evident here in court today. Under the Fair Trading Act I have no choice but to fine Knight. You can’t expect me to do nothing.”

Background
Michael Knight has previous trader history with the Commerce Commission.
 In 1994, the Commission obtained interim injunctions from the Auckland High Court relating to alleged breaches of the Fair Trading Act by Tasman Charter Flights Ltd and Air Australia Worldwide Marketing Ltd, companies promoted by Michael Knight.
 In 1992, the Commission unsuccessfully took civil action against NZ Dining Club (a Michael Knight company).

Within the Australian jurisdiction, the Michael Knight has an extensive history of fair trading offending. In New South Wales, Australia, Michael Knight has been banned for life from trading. In Queensland, he has been permanently restrained from engaging in trade or commerce relating to the tourism industry.

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