CHRISCO HAMPERED WITH $200,000 FINE

CHRISCO HAMPERED WITH $200,000 FINE

CHRISCO may be known for spreading cheer as one of Australia's largest Christmas retailers, but the company is less than jolly today after being hit with a whopping fine for sales misconduct.

The Christmas hamper distributor was put on the Federal Court's naughty list and ordered to pay a $200,000 penalty after it made unlawful statements regarding its lay-by policy.

Chrisco made the representation that its customers couldn't cancel lay-by purchases after making their final payments, a statement contested by the Australian Competition and Consumer Commission (ACCC) as false or misleading under Australian Consumer Law (ACL).

Contrary to Chrisco's policies, the ACL provides that customers are free to cancel their lay-by purchases at any time prior to delivery, even if payments have been made in full.

The Court also found that Chrisco's 'HeadStart Plan' contained an unfair contract term, as it allowed the company to continue taking direct debit payments after the customer had finished paying for their lay-by order.

To avoid having further money automatically taken from their accounts, customers were required to opt out of the debiting process.

ACCC chairman Rod Sims says Chrisco's case should act as a warning to other lay-by retailers to not mislead their customers and to be stringent in following all legal requirements under the ACL.

"The importance of the penalty imposed by the court against Chrisco is that it sends a strong message to businesses using lay-by as a method of sale that they must meet all of their ACL obligations, and do not mislead consumers about their rights," he says.

Sims says the lay-by system thrives particularly in the lead-up to Christmas, making it imperative for companies to make sure all policies are in line.

"We understand that making purchases by lay-by agreement is a convenient way for many Australians to shop, particularly for products such as Christmas hampers and presents.

"Consumers have termination rights at any time before the delivery of the goods, subject to a reasonable termination charge in some circumstances.

"The ACL provides that lay-by agreements must be in writing and transparent."

The ACCC was initially alerted to Chrisco's dodgy dealings via the Indigenous Consumer Assistance Network, as part of the ACCC's Indigenous consumer protection and outreach work.

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