The Commerce Commission found Home Direct was the only mobile trader that met its legal obligations.

Shoppers are being warned to think twice before buying from mobile traders selling products at many times their normal retail price.



Mobile traders, also known as truck shops, now operate throughout much of the country. They are particularly successful in lower-income areas because most do not require cash upfront to purchase items and do not do credit checks.



Mobile trading is growing business. At least 11 new operators have entered the industry since the start of 2013.



The traders emphasise weekly payments that seem cheap but often do not make clear the total amount customers will pay.

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At Home Zone, a Sony Playstation 4 Console is advertised at $33 a week.

SHANE WENZLICK/STUFF Darryl Evans says people are paying mark-ups of up to 700 per cent through mobile traders.

A customer service representative said that would be billed over 50 weeks, or $1650 all up. There are also booking, cancellation and delivery fees.

The same console is available for $535 from Mighty Ape.

Shop At Home sells a VS Sassoon Goddess hair straightener for $189. The same straightener sells for $99 at Farmers and Harvey Norman. A Mother's Choice Maidstone Cot is $329 at Babycity but $479 from Shop at Home.

123RF One truck shop was selling two litres of milk for $6.95.

At Lync Direct Shop, the PlayStation game Call of Duty Black Ops II is $119. At Mighty Ape it is $49.99. A baby capsule is listed for sale for $300 on payment terms of $10 a week. Plunket leases capsules for $60 to Community Services Card-holders.

A Trieste 6kg washing machine was advertised in a recent promotion for 104 weeks at $20, or a total $2080. Save Barn sells the same for less than $500.

There is no law that restricts what the retailers charge for their goods.

Lync refused to comment. Shop At Home did not respond.

Nyree Anderson, general manager of The Good Guys Group, which includes Home Zone, said her pricing was similar to normal retail stores. "We also run monthly 'sales' whereby we significantly decrease the price of goods and/or even give some away free. We provide these items to our customers on credit terms and do not charge any interest."

Darryl Evans, of Mangere Budgeting Services, said it was not uncommon for truck shops to have mark-ups of up to 700 per cent on the goods they were selling.

"One truck shop was selling two litres of milk for $6.95. Some of them buy a loaf of bread from The Warehouse for 99c and sell it for $5."

But consumers were using the trucks because they did not have enough money left over to pay for food. "They have to tick it up on credit, otherwise their kids go hungry."

He said bigger operators tended to have better contracts than smaller firms. Some of his clients had contracts from mobile traders without a start or end date, which did not specify what was being purchased.

Jessica Wilson, of Consumer NZ, said the weekly payments made people think they were paying less than they really were.

"Then there's an establishment fee, a fee if you miss a payment and a delivery fee. We've heard of cases where customers have continued to have payments go out when they thought hey had paid an item off but the contract allowed the company to keep taking money."

She said many retailers asked customers to sign multiple direct debit forms so that if they cancelled one, another could be started.

In some cases, people do not get the goods they sign up for until they have paid a set proportion of the price.

If they could not to make those payments, they sometimes found the cancellation fee was as high as the amount they had already paid so they would opt to forego the deal and be left without their money, or anything to show for it.

The Commerce Commission has been taking action against mobile traders who break responsible lending rules.

During a project through 2014 and 2015, it found all but one of 32 mobile traders were not complying with their Fair Trading Act and Credit Contracts and Consumer FInance Act obligations.

Four cases are before the courts. One, against Flexi Buy, relates to a charge of obtaining by deception and could result in a jail term if there is a conviction.

John Lyall, the Auckland consumer manager, said many customers of mobile traders did not understand what their rights were and were sometimes subjected to sales pressure. They were often not told about complaints processes available to them.

But one customer, Jaydeez Pule, was caught out when she was younger.

"I became a customer of a truck company and only ever got one singlet that cost $150. Being young and clueless I stopped paying them almost immediately. After about two years of receiving and ignoring penalty notices and extra charges, I later noticed on my bank statement that they had been taking a small amount out of my account each week for over a year so I rang them and asked how much I had paid and how much money I still owed.

"Their reply was 'your account is doing good you only have two payments still owing'. Turned out I had ended up paying around $3000. I finished payments and never dealt with that company again."

But she said the retailers had a place for some shoppers.

"The problem with them is that they tend to target lower-class consumers who are more likely to miss payments resulting in the companies making more money from penalty fees, not to mention interest, once you get behind in payments they make it very difficult to catch up.

"I actually really like [hire purchase] shops and trucks as it allows purchase of products without a large cash sum, I find it easier to pay weekly as I don't miss payments therefore don't get behind," she said.

"To be honest I don't really care if I have to pay extra, it works for me. Another issue is that some constantly encourage you to increase weekly payments to instantly receive more store credit then customers find they can't afford weekly payments and end up in debt."

Wilson called for more regulation. "The legislation needs to be strengthened. Door-to-door selling rules don't adequately cover this. Consumers are putting 'do not knock stickers' on their doors but these guys ignore them. We'd like to see regulation similar to Australia where door-to-door salespeople can be fined if they ignore a 'do not knock' notice."

Lyall said mobile traders would remain a focus for the Commerce Commission this year. "If we do find people not complying we will take enforcement action and seek significant penalties and compensation for people when we can."

The commission could also stop firms trading, he said.

During the next year, the commission will re-visit the mobile traders who received compliance advice, as part of a second mobile trader project.

Lyall said anyone thinking about using a mobile trader should consider whether they really needed the item. If they did, they should work out whether they had any other options.

"Can they get it from a retailer whose prices are probably more realistic? Think before you buy. Don't react to pressure, you have the ability to walk away. If you do go ahead, make sure you get everything in writing."