Mobile traders Ace Marketing Limited (Ace) and Xtreme Kiwi Deals (Xtreme) have been breaching responsible lending principles, according to the Commerce Commission.

Both mobile traders operated from Hamilton and sold consumer goods to vulnerable consumers in lower socio-economic communities across North Island.

Following an investigation by the commission, the court has found the delayed delivery terms used in contracts entered into by Ace were unfair and breached the Fair Trading Act.

Ace delayed delivery of goods bought by consumers on deferred payment plans if they happened to miss making a payment on time.

The investigation found that Ace did not clearly explain that delivery would be delayed if a customer missed payments.

“The court agreed that the terms weighed too much in favour of Ace, and customers faced harsh consequences for missing just one payment which wasn’t justified to protect Ace’s own commercial interests,” said Louise Unger, Commerce Commission’s GM of credit.

“While the principle of delaying delivery by, for instance, one week for a missed payment may be reasonable, our investigation found that Ace would increase the delivery times significantly into the future, sometimes up to seven weeks later than originally agreed for one payment missed.”

Likewise, Xtreme has been issued a formal warning letter and enforceable undertakings not to apply the terms about delayed delivery in any active contract.