Chrisco fined $175k under Fair Trading Act
The company pleaded guilty to charges relating to their Christmas hampers (file)
Christmas hamper company Chrisco has been fined $175,000 after pleading guilty to misleading customers about their cancellation rights.
Chriscp pleaded guilty to 10 charges under the Fair Trading Act following an investigation by the Commerce Commission.
The company was fined under the Layby Sales Act, which states that customers have the right to cancel at any time until the last payment, and controls the amount a company can charge customers who cancel.
Chrisco pleaded guilty to charges relating to its Toys and Gifts Catalogue, which stated that customers could not cancel their contract after a certain date, breaching the Layby Sales Act.
The company also pleaded guilty to charges relating to their Christmas hampers, which are paid off by customers in instalments throughout the year then delivered in time for Christmas.
Between 2008 and 2010 Chrisco’s hamper cancellation policy “meant that the company recovered more than it should have under the Layby Sales Act”, Commerce Commission Competition Manager Graham Gill says.
The company charged customers 20 percent of payments made if they cancelled up to 90 days prior to the final payment date, and 50 percent if they cancelled within the final 90 days.
Mr Gill says in some cases the cancellation fee was as much as $800. Chrisco has now revised its policy to 20 percent of payments made, with a cap of $250.
It also retrospectively refunded customers who had been overcharged.
Mr Gill says while the Commission is pleased customers were refunded, it is “is difficult to measure the extent of harm caused by Chrisco’s conduct”, especially considering some customers may have been put off cancelling by the prospect of a large fee.