Hamper company Chrisco fined for breaking New Zealand trading laws

Christmas and holiday hamper company Chrisco has been fined $NZ175,000 for breaking the country’s Fair Trading Act, after it was found to have misled customers regarding their rights to cancel layby orders.

The company is based in New Zealand, where the fine was handed down, although it operates a substantial business within Australia as well.

The fine was handed down by the Manukau District Court after the country’s competition watchdog, the Commerce Commission, whose competition manager Graham Gill said in a statement the business had charged customers to cancel laybys.

Chrisco offers a service whereby customers pay a small amount each week over the year to buy hampers of food for Christmas.

But the company charged customers 20% of payments already made if cancellations were initiated up to 90 days before the final payment date. If a cancellation was made within those 90 days, that fee increased to 50%.

This is unlawful, according to the Laby Sales Act and the Fair Trading Act. Chrisco was investigated and admitted to 10 different charges.

“Chrisco’s cancellation policy meant that the company recovered more than it should have under the Layby Sales Act, so customers were overcharged.”

“As the fee was worked out as a percentage of payments already made, some customers ended up being charged hundreds of dollars. In a few cases the fee was as much as $800,” Gill said in a statement.

Chrisco was forced to change its policy, and 750 customers were retrospectively refunded a total of $141,735. But the company also admitted to breaking the law with regard to a catalogue and “headstart plan”, which stated customers could not cancel contracts after a certain date.

However, Gill said there were still issues, given it would be difficult to determine how many customers had been charged illegally.

“It is difficult to measure the extent of harm caused by Chrisco’s conduct. In addition to those customers who cancelled and were charged fees, there were customers who may have been put off cancelling when faced with the prospect of a large fee.”