Thursday, December 1 2022

The Commerce Commission has warned five garden bag companies for making it look like customers have to pay for extra services they didn’t request.

Under the Fair Trading Act, it is illegal for businesses to demand payment for any good or service that a customer has not requested.

The Commerce Commission’s Fair Trade chief executive, Vanessa Horne, said customers were under the impression payment was expected as companies said rental charges would apply unless the bag was returned before a certain date.

“As the customers did not request the bag, or any additional services, the product was therefore ‘unsolicited’. It is illegal under the Fair Trading Act for any business to request payment or expect that ‘a customer takes action to avoid a payment, on an unsolicited good or service,’ Horne said.

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The commission highlighted several companies that have done so, including Gabco Garden Bags and Bins, The Garden Bag Company, Manukau Garden Bins, Clippa Garden Bags and Bins, and Greenfingers Garden Bags.

Customers began complaining to the commission after garden bags were dropped off at around 40,000 homes of existing customers as part of a marketing activity between October 2020 and January 2021.

The garden bags were dropped off with a letter or email stating that the bags were offered on a trial basis, in addition to their current green waste collection service. The commission has warned five garden bag brands for making it look like customers have to pay for extra services they didn’t request.

Garden, gardening, generic tomatoes

Priscilla du Preez/Unsplash

Garden, gardening, generic tomatoes

The companies said a $26 fee would apply if customers keep the bag after a certain date. Customers were told that if they didn’t want to keep the bag they should contact the company and book a move.

“It is important when bringing new products and services to market that companies always understand their obligations under the Fair Trading Act. They should not expect payment from customers if they deliver a good or provide a service that was not requested, and they should not mislead customers into believing that they have to decline a payment,” Horne said.

The commission said no clients were billed for the trial.

“Brands have since reviewed their marketing materials and internal approval processes to ensure the conduct never happens again,” Horne said.


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