“If it ain’t broke, fix it” policy costs shop

3 May 2006/128

“If it ain’t broke, fix it anyway” policy costs appliance shop $20,000

A home appliance business and its owner have been fined more than $20,000 after employees were instructed to tell lie about the age of second hand appliances and recommend unnecessary repairs.

Mr Brian Soper and his company Brian Soper Appliances Limited, trading as Noel’s Appliance World, admitted in the Christchurch District Court that technicians were told to make unnecessary repairs. Staff were instructed by Soper to tell customers that replacement parts were necessary when they were not, and to say that second-hand appliances for sale in the company’s showroom were newer than they were.

Staff were often instructed to scrape off markings identifying the model numbers of second-hand appliances for sale, and to remove labels containing the model details on some of those appliances.

In addition to those charges, Soper and his company pleaded guilty to specific charges of making a false or misleading representation to a customer that she needed a new washing machine pump when she did not.

Judge Erber recognised the personal responsibility of Mr Soper by ordering him to pay more than $13,000 of the $20,769 total fines and costs.

In sentencing, Judge Erber said of the company that ‘there was a policy of “if it ain’t broke, fix it anyway”’. He also referred to the ‘vulnerability of the householder who relies on the honest expression of expert opinion’ and noted the deliberate and clear commercial purpose of the offending.

Commerce Commission Director of Fair Trading, Deborah Battell, said that this is the first time the Commission has prosecuted a trader for misrepresentations about repairs or replacement of parts.

She described the prosecution outcome as a warning to all business owners that they face a significant penalty for instructing staff to mislead customers:

‘When dealing with technical issues, such as the repair of home appliances, the consumer must be able to trust in the honesty and integrity of the advice they are given by a tradesperson.’

‘By asking his staff to lie to customers, Mr Soper abused that trust and has been held accountable for those actions.’

Background

Section 13(d) of the Fair Trading Act 1986 states that no person shall make a false or misleading representation that goods are manufactured at a particular time.

Section 13(h) of the Act states that no person shall make a false or misleading representation concerning the need for any goods or services.

ENDS

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