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An Auckland finance company was penalised more than $70,000 in Auckland District Court today in a ground-breaking prosecution for giving customers unreadable documents about terms and conditions.
In the first prosecution under the Credit Contracts and Consumer Finance Act, Senate Finance, which provides money for people buying cars, was fined $59,000.
Seventeen customers were awarded a total of $13,700 in statutory damages.
Senate is a subsidiary of Stock Exchange-listed Dorchester Pacific Group.
The firm pleaded guilty to 17 breaches of the act for not adequately disclosing the terms and conditions of its loans.
Failing to do so meant the contracts were unenforceable and Senate also pleaded guilty to eight charges of breaching the Fair Trading Act by telling a customer the contracts were enforceable.
The court was told Senate's documents had been faxed and photocopied, and in some cases were so distorted they were impossible to read.
One car salesman told a customer to "use a magnifying glass" if he couldn't read the documents.
Commerce Commission general manager Geoff Thorn said later the penalties handed down "send a very clear signal to all finance companies that...documents must be legible."
He welcomed the penalties and warned finance companies the commission would actively pursue breaches of the CCCF Act.
"This first successful prosecution should leave the credit industry in no doubt as to its obligations to consumers in this area."
- NZPA
