Commerce Commission v Appenture Marketing Limited [2018] NZDC 3266

Published 26 November 2018

Sentencing — Fair Trading Act 1986, s 13 — Credits Contracts and Consumer Finance Act 2003, ss 17, 55, 83 — Consumer Guarantees Act 1993. Appenture Marketing Ltd (in liquidation) (AML) appeared for sentencing on 24 charges under the Fair Trading Act (FTA) and the Credit Contracts and Consumer Finance Act (CCCFA). The maximum sentence per charge under the FTA was $600,000 and $30,000 per charge for the CCCFA. The charges were representative and related to 908 consumer credit contracts that AML entered into before it went into liquidation. 18 of the charges were for breaches of FTA, s 13(1) by making false or misleading representations to consumers. The other 6 charges were in relation to breaches of CCCFA, s 17 for failing to disclose to debtors, key information required under the Act. AML operated as a mobile trader in Auckland, and was active through the North Island, particularly targeting low socioeconomic suburbs. The company sold consumer goods, such as electronics, door to door on credit for much greater prices than the charges for those same items in mainstream stores. The contracts failed to include application fees, correct final payment amounts and when fees would become payable. AML also failed to state how the debtor could make a hardship application under CCCFA, s 55. They further failed to state the frequency with which continuing disclosure statements would be provided to debtors, as well as AML's registration number under the register of financial service providers or the name under which it was registered. The company made misrepresentations about their (lack of) liability for late products, ability to provide substitute products and right to charge interest following repossession and sale. In determining the appropriate fine for AML, the judge considered Commerce Commission v Budget Warehouse Ltd, Commerce Commission v Smart Shop Ltd, Commerce Commission v Ace Marketing Ltd and Commerce Commission v Wenatex New Zealand Ltd. Although AML had gone into liquidation and had almost no prospect of paying the fines, the judge emphasised the importance of deterrence in these types of cases. There were no aggravating factors and a 5 per cent discount was given in recognition of AML's cooperation with the Commerce Commission's investigation. AML was fined $114,000 for each misrepresentation under the FTA and $47,5000 for the CCCFA charges. All of the fines were concurrent, so the total fine was $114,000. Judgment Date: 2 February 2018.