Ace Marketing Limited (Ace), a mobile trader targeting lower socio-economic communities across the North Island, has had delayed delivery terms used in its contracts declared unfair by the Commerce Commission. The company has also breached responsible lending principles though failing to highlight and explain the delayed delivery terms in a way that helped consumers reach an informed decision about entering into the contract.
An injunction prevents Ace from providing credit to consumers under any new contracts until it amends them to comply with the relevant responsible lending principles.
A second business, Xtreme Kiwi Deals, has been warned by the Commission for similar conduct and has provided enforceable undertakings that it will not apply the delayed delivery terms in any current or future contract.
“While the principle of delaying delivery by, for instance, one week for a missed payment may be reasonable, our investigation found that Ace would increase the delivery times significantly into the future. For example, sometimes up to seven weeks later than originally agreed for one payment missed,” said Louise Unger, Commerce Commission General Manager of Credit.
“The Court agreed that the terms weighed too much in favour of Ace, and customers faced harsh consequences for missing just one payment which weren't justified to protect Ace’s own commercial interests”
“We have warned Xtreme on the same matters as Ace Marketing - including potentially unfair terms about delayed delivery in the contract and failing to make those contract terms clear and easy to understand. Xtreme has also agreed through enforceable undertakings not to apply the terms about delayed delivery in any active contract, and not to include the terms about delayed delivery in any new contracts.”
