Door-to-door Trader Banned From Providing Credit

Mobile trader Ace Marketing Limited (Ace) and its director have been issued with two banning orders by the Auckland District Court preventing them from operating in the consumer credit industry for five years.

Ace is a mobile trader that sold consumer goods (such as smartphones) door-to-door to consumers on credit. It has twice been found by the courts to have breached consumer credit and fair trading laws.

Commerce Commission General Manager of Credit, Louise Unger, says the banning orders will protect consumers against the potential that Ace’s failures to comply with fair trading and consumer credit laws continued in the future.

“Both Ace and its director, Mr Sandip Kumar, will not be allowed to sell goods or services on credit in Aotearoa New Zealand. Mr Kumar has also been banned from taking part in any director or managerial positions of any consumer credit provider.” 

The Commission’s dealings with Ace first arose in 2015, following consumer complaints.

In 2016, Ace was fined $150,000 under the Credit Contracts and Consumer Finance Act (CCCFA) for failing to provide consumers with key information about their loans. It also breached the Fair Trading Act, by misleading consumers about their rights available under the Consumer Guarantees Act.

In 2021, in a second case against Ace, the business was found to have breached the responsible lending principles under the CCCFA, through failing to highlight and explain delayed delivery provisions to consumers. The provisions were also declared as unfair contract terms under the Fair Trading Act.

Ms Unger says while these bans conclude the Commission’s most recent enforcement against Ace, the Commission’s work in the mobile trader industry is ongoing.

“We have just completed our second compliance review into mobile traders since our first mobile trader project in 2015. This review identified that while we are seeing increasing levels of compliance in the industry, there are still businesses falling short of their obligations.”

The Commission is continuing to engage with and educate mobile traders to increase compliance, through initiatives such as lender seminars, issuing compliance advice to traders and taking enforcement action where that is warranted.

“We are also engaging with businesses about the certification laws that came into effect last year,” Ms Unger says.

“The new laws prevent businesses from offering consumer credit unless the Commerce Commission certifies that their directors and senior managers are fit and proper to perform their roles.

“As a new function for the Commission, certification serves as an additional tool to set high standards of personal and professional integrity for those involved in providing a lending or mobile trading service.”

There is more information on the banning orders against Ace and Mr Kumar on the Commission’s website here, including the District Court judgment. There is also more information about the obligations that mobile traders must comply with here, and information about certification laws here.

Background

Ace Marketing
Ace Marketing Limited sold consumer goods at prices significantly higher than what is charged in mainstream stores, via door-to-door sales agents.

Banning order
Section 108 of the CCCFA empowers the District Court to prohibit or restrict a person's involvement in the credit industry in certain circumstances and where the Court is of the opinion the person is not a fit and proper person to enter consumer credit contracts as a creditor.

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