In the latest Lane Neave Business Law Newsletter:
Trader jailed for failing to supply goods
In a New Zealand first, a prosecution initiated by the Commerce Commission against a mobile trader has resulted in a term of imprisonment. Earlier this month, Vikram Mehta, the sole director and shareholder of Flexi Buy Limited, was sentenced to two years jail for obtaining a monetary benefit by deception, in breach of section 240 of the Crimes Act 1961. Between late 2012 and early 2014, Flexi Buy, a household and electronic goods company, sold household and electronic goods door-to-door around the North Island. Customers were signed up to payment plans, and promised they would receive their goods after making a certain number of payments. However, of some 300 orders placed by customers during this period, only nine orders were fulfilled.
Commerce Commission continues to audit industries for compliance with ‘unfair contract terms’ legislation
The Commerce Commission is systematically reviewing industries that commonly use ‘standard form consumer contracts’ for compliance with New Zealand’s ‘unfair contract terms’ legislation, which came into force in 2015. Having completed its reviews of standard form consumer contracts used by energy and telecommunications sectors in 2016, the Commerce Commission is now turning its attention to credit companies, rental car companies, gyms and online coupon deals. Participants in these industries may be contacted by the Commission over the next few months, and asked to provide a copy of their standard form consumer contracts for the Commission to review. The findings of the Commission’s industry reviews will be made publically available, and, where non-compliance is identified, the Commission may take enforcement action.
Agent found guilty of attempted price-fixing with principal in ground-breaking Australian High Court decision
The recent Australian decision of Flight Centre v ACCC has important implications for travel agents, insurance brokers, mortgage brokers and other agents and their principals on both sides of the Tasman. On 14 December 2016, the High Court of Australia held (in a four to one decision, with Chief Justice French dissenting) that Flight Centre had engaged in attempted price fixing with certain airlines’ in-house sales teams, in contravention of Australia’s anti-cartel laws (upon which sections 27 and 30 of New Zealand’s Commerce Act 1986 are modelled).
Commerce Commission clamps down on misleading advertising claims
The Commerce Commission has been very active in enforcing the Fair Trading Act 1986 recently, with misleading pricing particularly high on the Commission’s agenda for 2017. Making headlines last month were three high profile Fair Trading Act cases concerning well known brands Nurofen, Bike Barn and Bunnings, all of which were alleged to have engaged in misleading advertising. These cases highlight the importance of truthfulness and accuracy in advertising, and serve as a reminder that all marketing strategies, regardless of how clever or effective, must comply with minimum legal standards of fairness and transparency.
Business Law team
If you have any queries in respect of the above, or any other business law issues, please contact a member of Lane Neave’s Business Law team:
Gerard Dale, Claire Evans, Graeme Crombie, Joelle Grace, Anna Ryan, Peter Orpin, Jacob Nutt.
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