Harvey Norman fined for misleading customers

Retailer Harvey Norman has been fined $16,000 for misleading customers into thinking their furniture repayments would be lower than they were.

The Commerce Commission laid charges under the Fair Trading Act after people complained their payments were higher than they were led to believe when taking out four-year interest-free furniture deals.

Harvey Norman pleaded guilty in Manukau District Court.

In sentencing the company yesterday, Judge Robert Kerr said by making the representations on the four-year deal, Harvey Norman had obtained an unfair advantage in the very competitive retail furniture market.

The Commerce Commission said in a statement that one customer was told that the repayments would be "50-something dollars monthly", but the initial repayments turned out to be $85.

Another customer was quoted $40 but the initial repayments were $58 a month.

In addition, if customers made the minimum payments required by the finance company Harvey Norman worked through, one of the customers would have taken five years to pay off the account while the second would have taken seven years.

But after four years the customers would have to pay interest.

"Ultimately, as a result of complaints to Harvey Norman, the company adjusted the repayments to reflect the equal payment structure in over 100 of 1080 accounts created through the offer," Commerce Commission chairwoman Paula Rebstock said.

- NZPA