Court bans mobile trader from offering credit

Auckland District Court Photo for RNZ by Clarie Eastham-Farrelly

Supplied Content (Edited)
Wellington, December 20, 2022

The Auckland District Court has issued Mobile trading company Ace Marketing Limited (Ace) and its Director with two banning orders preventing them from operating in the consumer credit industry for five years.

The Commerce Commission brought charges against them to the Court.

Commerce Commission General Manager (Credit) Louise Unger said that Ace is a mobile trader that sold consumer goods (such as smartphones) door-to-door to consumers on credit.

“It has twice been found by the courts to have breached consumer credit and fair trading laws.
Both Ace and its Director Sandip Kumar will not be allowed to sell goods or services on credit in Aotearoa New Zealand. Mr Kumar has also been banned from taking part in any director or managerial positions of any consumer credit provider.”

She said that banning orders will protect consumers against the potential that Ace’s failures to comply with fair trading and consumer credit laws continued in the future.

Background to the ban

Ace Marketing Limited sold consumer goods at prices significantly higher than what is charged in mainstream stores, via door-to-door sales agents.

Section 108 of the CCCFA empowers the District Court to prohibit or restrict a person’s involvement in the credit industry in certain circumstances and where the Court is of the opinion the person is not a fit and proper person to enter consumer credit contracts as a creditor.

The Commerce Commission said that its dealings with Ace started in 2015, following complaints from customers.

“The Company was fined $150,000 in 2016 under the Credit Contracts and Consumer Finance Act (CCCFA) for failing to provide consumers with key information about their loans. It also breached the Fair Trading Act, by misleading consumers about their rights available under the Consumer Guarantees Act.

“In 2021, in a second case against Ace, the business was found to have breached the responsible lending principles under the CCCFA by failing to highlight and explain delayed delivery provisions to consumers. The provisions were also declared as unfair contract terms under the Fair Trading Act,” the Commission said.

According to Ms Unger, these bans conclude the Commission’s most recent enforcement against Ace and that the Commission’s work in the mobile trader industry is ongoing.

Compliance Review

“We have just completed our second compliance review into mobile traders since our first mobile trader project in 2015. This review identified that while we are seeing increasing levels of compliance in the industry, there are still businesses falling short of their obligations,” she said.

The Commission is continuing to engage with mobile traders and educate them to increase compliance, through initiatives such as lender seminars, issuing compliance advice to traders and taking enforcement action where that is warranted.

“We are also engaging with businesses about the certification laws that came into effect last year. The new laws prevent businesses from offering consumer credit unless the Commerce Commission certifies that their directors and senior managers are fit and proper to perform their roles. As a new function for the Commission, certification serves as an additional tool to set high standards of personal and professional integrity for those involved in providing a lending or mobile trading service,” she said.

There is more information on the banning orders against Ace and Mr Kumar on the Commission’s website, including the District Court judgment. There is also more information about the obligations that mobile traders must comply with here, and information about certification laws. Please visit www. https://comcom.govt.nz/

Source: The Commerce Commission, Wellington

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