Bedding company fined for misleading consumers

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A company which sold high-priced "sleep systems" at invitational seminars has been fined $69,935 for misleading consumers about the right to cancel their contracts.

Wenatex New Zealand Limited has pleaded guilty in the Auckland District Court to 34 Fair Trading Act and Credit Contracts and Consumer Finance Act charges, the Commerce Commission said.

The company invited people to seminars at community centres where its beds and bedding were for sale.

"Many of the people who attended the seminars were elderly or people looking for a health benefit," the commission said.

Bedding packages, or "sleep systems", were often priced at about $5000, and a large deposit was payable at the seminar with the balance to be paid on delivery or on credit over several years.

However, Wenatex failed to advise customers they had a right to a "cooling-off" period, which is applicable to all goods sold door-to-door or in other high-pressure sales situations such as seminars.

"The cooling-off period gives consumers the chance to cancel a contract and receive a full refund of any amount they have paid," the commission said.

"Wenatex's sales contracts did not set out this right of cancellation and, in addition, the contracts misled customers by stating that deposits were not refundable. When some customers legitimately attempted to cancel their contracts, Wenatex representatives told them that their deposits would not be refunded."

Commerce Commission competition manager Graham Gill said businesses needed to ensure they did not mislead customers on their consumer rights.

"It is fundamental that consumers are given complete and correct information when they enter contracts like this," Mr Gill said.

"A customer's right to cancel the contract within a certain timeframe and receive any deposit back is an important right and needs to be clearly stated."

Wenatex was also ordered to make refunds of $1285 and to pay costs of $4518.