Investigation launched into 'leech' sales staff

A Home Direct truck parked on Kaikorai Valley Rd outside Glenross Apartments last year. Photo / ODT

They arrive in trucks loaded with goods for sale - televisions, steam mops, vacuum cleaners and the like. Among the salesmen's customers are vulnerable beneficiaries living in a boarding house. Shawn McAvinue uncovers a company's staff doing business in its own ''no-go zone''.

Mobile shopping company Home Direct says it has ordered a ''thorough internal investigation'' after it was revealed some of its door-to-door sales staff regularly visit beneficiaries in a Dunedin boarding house and pressure them to buy.

Boarding houses are a ''no-go zone'' under the company's own policy.

Home Direct managing director Michael Wright, of Auckland, said visiting the house was a clear policy breach and employment action might follow.

Alva House tenant Judith Harris-Dent said Home Direct staff regularly knocked on the door of her Central Dunedin room.

A Home Direct truck parked on Kaikorai Valley Rd outside Glenross Apartments last year. Photo / ODT

She and her husband, sickness beneficiary Danny Dent, were often at home because she also lived on a benefit to care for him.

The salesman invited her to make purchases on her husband's account, as he struggled to get his cancer-riddled body from the room, which the couple rented for $170 a week, out to the sales truck parked in High St.

''They are leeches,'' Ms Harris-Dent said.

''They'll rob you blind. If they could, they'd be here every day.''

The sales staff were on commission and pressured residents to buy, she said.

Mr Dent had paid Home Direct $35 a week, from his sickness benefit, for several years.

He said he once overpaid his account by $2000. Home Direct refused to return his money in cash, telling him it could only be recouped by buying goods from the truck.

Although he considered Home Direct goods to be overpriced, he wanted a television and considered taking a set with a built-in Freeview decoder from the truck.

Ms Harris-Dents said banks would not loan the couple money and although Home Direct was the most expensive option for buying a television, they could get it immediately.

''With Home Direct, it's there - you don't have to wait. That's what attracts people.''

Alva House live-in manager Win (who did not want her surname to be published) said Home Direct staff had regularly visited in the 16 years she had lived there.

Often the sales staff knocked on her door, searching for tenants.

''I get angry and say they don't live here - whether they live here or not.''

Glenross Apartments tenant Stephen Hughes holds a vacuum cleaner he bought from a Home Direct sales truck. Photo / ODT

Despite her ''sharpness'', the Home Direct staff roamed the hallways seeking past and prospective tenants, she said.

Many of the house's tenants were on a benefit and had mental health issues, she said.

The tenants who signed on with Home Direct often struggled to pay the rent each week.

She deducted any rent shortfall from a tenant's bond, and when the bond was depleted, the tenant had to be evicted.

''It just gets sickening,'' Win said.

Across Dunedin, a sign on a fence outside Glenross Apartments in Kaikorai Valley Rd, advertises accommodation available to rent for between $130 and $145 a week.

Tenant James Andrews (23) said he had lived in an apartment for more than a year and every week a Home Direct salesman knocked on his door, inviting him to look in the red truck.

He refused every time but the salesman kept knocking on his door.

In an upstairs apartment, tenant Stephen Hughes (50) said he became a Home Direct customer about three years ago, after signing a contract to take a vacuum cleaner from the truck.

''I got jammed with them.''

He paid Home Direct $29 a week - a ''fair whack'' of his unemployment benefit.

He was unaware how much he owed Home Direct, nor of the interest rate.

''You never know where you are and then they give you credit to keep you hanging on.''

In the past three years, he had taken 20 items from the truck, including shoes, a carpet cleaner and a steam mop.

Mr Hughes was happy being a Home Direct customer because it was convenient and goods were available immediately. Businesses in town refused to give him a hire purchase agreement because of his limited income, he said.

Dunedin Budgeting Advisory Service executive officer Shirley Woodrow said nearly half the clients seeking budgeting advice were paying a weekly direct credit to Home Direct.

Many were beneficiaries and found themselves short of money to pay for essentials, such as food and electricity.

When they signed a Home Direct contract, most of her clients had no idea what the interest rate was. Nor did they understand the contract they were signing.

''They have no idea what they have let themselves in for,'' Mrs Woodrow said.

Mr Wright said the company's policy was designed to stop staff visiting ''restricted addresses'' including boarding houses.

''This is now subject to a thorough internal investigation and could become the basis of an employment action.

''As part of our staff induction and ongoing training, our team are aware that all boarding houses are a no-go zone.

''We take very seriously any breaches of this policy and investigate any incidences of this happening to ensure it doesn't happen again.''

Mr Wright said he would ensure staff did not visit Alva House but as Glenross Apartments was listed as individual residences, and not considered a boarding house, it was not a restricted address.

Glenross Apartments owner Diana Johnson said Home Direct preyed on her tenants and was ''absolutely despicable''. She wanted its staff to stop visiting the apartments.

''As a landlord, I care about the wellbeing of my tenants and would like Home Direct to stop preying on my tenants.''

Mr Wright said Home Direct staff explained the contract conditions, including the interest rate of 19.5% per year.

Most Home Direct sales staff were paid a ''mixture of salary and commission'' and had been trained to ensure no "pressure-selling tactics'' were used, he said.

When asked if it was fair to refuse Mr Dent's request to have overpaid money refunded in cash, Mr Wright said payments were stopped when a customer had paid their debt unless they had opted in to Home Direct's ''voucher scheme''.

''When a customer first sets up their account with us, they let us know whether they want to opt in, or out, of the voucher scheme, which is a way of paying ahead for goods.''

Consumer NZ chief executive Sue Chetwin said Home Direct sold overpriced goods to vulnerable people.

The sales trucks were a problem in poorer areas in New Zealand and were most prolific in South Auckland and Porirua.

Mr Dent overpaying and having to buy goods rather than be paid cash was illegal, she said.

The Commerce Commission would take a ''dim view'' of a contract with a voucher system.

A Commerce Commission spokeswoman urged Mr Dent to phone the commission about being refused a cash refund.

The commission had started a project recently to ensure truck shop operators improved their compliance with consumer law, she said.