Commerce Minister Kris Faafoi released details of new anti-predatory lending legislation which comes into effect next year.

Regrouped, rebranded, and returning to a poor neighbourhood near you.

Truck shops selling $35 packets of noodles, and $4500-a-pair cellphones, are brazening out legal attention and maintaining a presence in poor neighbourhoods, community groups say.

Now they hope new legislation will curb an industry offering easy credit for overpriced goods to people who can least afford it.

KEVIN STENT/STUFF Salvation Army community care worker Allana Lloyd stands in front of the Good Shop - a mobile service set up by the group to combat the problem of truck shops by offering responsible credit to purchase goods, and financial advice for the community in eastern Porirua.

Salvation Army community ministries programme coordinator Jodi Hoare said the trucks would drive around neighbourhoods and "literally lend to everyone they see". Their products cost about three times the usual price, she said.

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The army had launched its own service The Good Shop, to combat the problem, allowing people to buy from home on credit - but offering reasonable prices, no-interest loans and financial advice.

KEVIN STENT/STUFF Salvation Army community ministries manager Robyn Bruce sits in one of the two interview offices in the Good Shop van in Cannons Creek, Porirua

A fridge-freezer sold by the Army went for $999 - Hoare said she had seen the same model go for $2999 from a truck shop.

The Porirua service was running well, she said, but the private trucks still appeared to be rolling - despite a Commerce Commission crackdown since 2014.

"They sort of regrouped, rebranded a bit, maybe changed a little bit in terms of how they practice...but we didn't see a drop in their presence."

LIBBY WILSON/STUFF Home Direct was the subject of a High Court declaration in November over unfair contrct terms. FILE

Consumer head of research Jessica Wilson said truck shops targeted low-income communities - attracting customers by highlighting easy weekly repayments.

"We've heard reports of $35 being charged for a packet of noodles. In another case, a customer was charged $4500 for two mobile phones."

Mobile traders were one of the reasons Consumer launched its Do Not Knock campaign, distributing free stickers for front doors "to tell these traders they're not welcome".

KEVIN STENT/STUFF One of the two interview offices in the Good Shop van in Cannons Creek, Porirua.

New legislation would make ignoring 'do not knock' stickers an offence, she said.

In November the Commerce Commission took proceedings against mobile trader Home Direct in the High Court, where it was declared to have included unfair terms in its contract for a voucher scheme - costing customers more than $644,000.

Under the scheme, customers continued to make direct debit payments to Home Direct after they paid off their goods. The business converted the payments into voucher entitlements, which could only be used for buying more goods from Home Direct.

The vouchers were not refundable for cash and expired after 12 months. Home Direct kept the forfeited money.

The Commission said the scheme ran between 2009 and 2018 with more than $644,000 forfeited by customers to the business.

Under law, once a term is found to be unfair, the Commission can prosecute a company if it uses it. Home Direct has stopped the voucher scheme.

A spokesman said in the past few years the Commission successfully completed 13 prosecutions against mobile traders with fines totalling nearly $1.6m. "We have not taken any prosecutions since April 2018. However, the Commission has two current investigations into mobile traders."

The Commission was compiling a list of all mobile traders preparing for certification, "which will involve considering whether their directors and senior managers are fit and proper to perform their role".

New legislation kicks in from April 1 next year, which aims to rein in bad behaviour from mobile traders.

Minister of Commerce and Consumer Affairs, Kris Faafoi, said the changes meant the bar would be higher for people wanting to operate the trucks.

"For too long the truck shops have preyed on people in Porirua's communities. They will have clearer responsibilities and serious consequences if they don't follow the new laws."

Home Direct had not responded to questions by time of publication.

The Commission said the business had credited customers more than $133,000 and agreed to refund customers who had vouchers which were forfeited from March 17, 2015, when the unfair contract term provisions became law, and the closure of the scheme in July 2018.

NEW LAW FOR 2020

A 'fit and proper person' test and register as financial service providers before they can operate.

A clearer process for mobile traders checking if customers can afford credit arrangements. If they don't check correctly, they will be liable under the Act.

Increased enforcement and tougher penalties for lenders who break the law.

Penalties of jail time or fines of up to $300,000.

Traders must abide by consumers' requests not to enter their properties; upcoming Fair Trading Act changes will strengthen the legal status of 'do not knock' stickers.

COMMERCE COMMISSION ADVICE

Buying from mobile traders can be a convenient option but make sure you understand all the terms – including the total price you'll pay – before signing up.

The mobile trader business model is usually based on selling goods on credit at higher prices than offered by traditional retail stores

It's important that you know how much the total price of your goods will be as well as the weekly price. A pair of shoes could be paid off over six months at $10 per week. This may not seem much but the end price could end up being $260 instead of $70 for the same shoes on the high street.