Commerce Commission v Auckland Academy of Learning Ltd [2017] NZDC 27148

Published 21 August 2018

Misrepresentation — failure to disclose — subscription agreements — purchase agreements — fees — misleading consumers — educational software — telemarketing — commercial entities — Fair Trading Act 1986. The defendant company was sentenced on 11 charges under the Fair Trading Act in relation to a product sold to parents across New Zealand. Salespeople for the defendant company followed scripts when speaking to prospective purchasers while trying to sell the education software. During the sale process, misrepresentations about the performance, characteristics, uses or benefits, need for and suitability for purpose of the CAMI programme, were made to the prospective purchasers, failing to inform them that they had a right to cancel the agreement and failing to disclose key information about credit provided for the software. The court described the marketing tactics as "cynical marketing" and that the misrepresentations made to parents were built into the systems that the company set up. In setting a starting point, the court had regard to the serious level of the offending, the vulnerability of the victims and the financial detriment suffered by them. From a starting point of $500,000 on the misrepresentation charges, discounts were applied in mitigation for the defendant's co-operation and guilty pleas. The court declined to reduce the fine to reflect the company's ability to meet a fine as there was insufficient information available on the company's financial position. The defendant company was fined a total sum of $351,000, to be paid over a period of three years. Judgment Date: 28 November 2017.