Not such a Merry Christmas: Chrisco hampered by court action over unfair contract terms

POPULAR Christmas hamper company Chrisco is in hot water with the consumer watchdog for allegedly helping itself to customers’ bank accounts.

POPULAR Christmas hamper company Chrisco is in hot water with the consumer watchdog for allegedly helping itself to customers’ bank accounts.

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Chrisco Hampers Australia, alleging it breached Australian Consumer Law.

The ACCC claims Chrisco used an unfair contract term in its 2014 lay-by agreements to continue to take payments by direct debit from customers’ accounts even after they had fully paid for their hamper.

As part of Chrisco’s ‘HeadStart Plan’, the surplus payments would go towards next year’s hamper — even before the customer had agreed to purchase it.

Under the contact term, consumers were required to opt-out in order to avoid having further payments deducted after their lay-by had been paid for.

The ACCC says it became aware of the alleged conduct following a tip-off from the Indigenous Consumer Assistance Network, as part of the ACCC’s indigenous protection and outreach work.

While the conduct is alleged to be national, Indigenous communities in far north Queensland raised concerns about the marketing practices.

Santa packs Chrisco hampers onto a truck. The popular Christmas hamper company is being taken to court over alleged unfair contract terms and misleading conduct.

The ACCC also alleges that from January 2011 to at least December 2013, Chrisco made false or misleading representations to consumers that they could not cancel their lay-by agreement after making their final payment.

Under Australian Consumer Law, consumers have the right to terminate a lay-by agreement at any time before delivery of the goods.

“Purchasing goods by way of a lay-by agreement is convenient for many Australian consumers, particularly for Christmas,” said ACCC Chairman Rod Sims.

“The ACCC is concerned to ensure that traders using the lay-by sales method comply with their obligations under the ACL, including those in relation to termination rights and lay-by termination charges.”

Mr Sims said the ACCC saw the Chrisco case as part of a broader issue of consumer protection in vulnerable communities. “We are putting a lot of effort into these sort of matters,” he said.

“We’re very close to the relevant government organisations and the Indigenous groups, we’ve got teams of people doing outreach work in these communities.

Carpentaria Shire mayor Fred Pascoe told the ABC earlier this month that people had signed up to appliance rental contracts without realising the ramifications.

“We are putting a lot of effort into informing people of their rights and then backing it up with enforcement action. We’ve had people selling mobile phones in areas with no coverage, we’ve had people selling things and telling people they had no right to change their minds. These are very vulnerable communities.”

An investigation by the ABC earlier this month found people in remote parts of Queensland, often on government assistance, were being signed up to lease household items such as fridges and washing machines at massively inflated prices.

In a statement, Chrisco said it would work cooperatively with the ACCC to resolve the matter. “We take these allegations and compliance with consumer laws very seriously,” said CEO Richard Bradley.

“We will carefully review the allegations and respond to them in due course. We have a Compliance Program in place and will take further steps to make sure we meet the requirements under the Australian Consumer Law.

“We are committed to ensuring that Chrisco staff at all levels understand and comply with our obligations under the Australian Consumer Law.”

The ACCC is seeking pecuniary penalties, declarations, injunctions, non-party consumer redress and costs. The matter is set down for a directions hearing in Brisbane on Friday 6 February 2015.

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