The Commerce Commission has filed criminal charges against HelloFresh New Zealand, alleging the company misled consumers in cold calls used to “re-activate” customers who had cancelled the food delivery service.
The claim related to conduct between February 2022 and July 2023, when previous HelloFresh customers were offered a discount voucher without it being made clear that accepting the voucher would reactivate their subscription.
Commerce Commission Deputy Chair Anne Callinan said the Commission believed that Hello Fresh breached the Fair Trading Act because some cancelled subscriptions were reactivated without the customers’ express knowledge or consent.
“Taking payment for services customers aren’t aware they’re buying or have not agreed to purchase is unacceptable behaviour,” said Callinan.
“We’re concerned some consumers have been misled into paying for services from HelloFresh they didn’t want through the use of misleading wording and processes in cold calls.”
She added that in these calls, it was unclear to some customers that if they accepted the discount voucher offered, their subscription would be reactivated, and their bank account would be debited.
Buying products online has become an increasingly common way of life for Kiwi consumers, so the Commission has prioritised action against illegal online sales. This includes subscription traps, which come in many forms and include situations where consumers are misled into signing up for a paid subscription without knowing.
Subscription traps have also become more common as more businesses offer subscription-based services. The Commission has received more complaints about subscription services, how consumers have been signed up to ongoing service contracts, and difficulties cancelling subscriptions.
“The Commission will continue to take action against misleading conduct such as subscription traps and this is one of our current enforcement priorities.”
The Commission started an investigation into HelloFresh after receiving a large number of complaints about its sign-up, cancellation, and reactivation processes. Charges were filed in the Wellington District Court.
