The Commerce Commission has filed criminal charges against HelloFresh New Zealand, alleging the company misled consumers through cold calls aimed at reactivating customers who had cancelled their food delivery subscriptions.
The charges relate to conduct between February 2022 and July 2023, during which former HelloFresh customers were offered a discount voucher without it being made clear that accepting the voucher would reactivate their subscription.
Commerce Commission Deputy Chair Anne Callinan said the Commission believes HelloFresh breached the Fair Trading Act, as the practice led to some cancelled subscriptions being reactivated without the customers’ express knowledge or consent.
“Taking payment for services customers aren’t aware they’re buying or have not agreed to purchase is unacceptable behaviour,” Callinan said.
“We’re concerned some consumers have been misled into paying for services from HelloFresh they didn’t want through the use of misleading wording and processes in cold calls.
“In these calls, it was not made clear to some customers that if they accepted a discount voucher, their subscription would be reactivated, and their bank account would be debited.
“Buying products online is increasingly a way of life for Kiwi consumers, and so the Commission is prioritising action against illegal online sales conduct. This includes subscription traps, which come in many forms and include situations where consumers are misled into signing up for a paid subscription without knowing.
“Subscription traps are becoming more common as more businesses offer subscription-based services. We’re seeing more complaints about subscription services, the way consumers are being signed up to ongoing service contracts, and difficulties in cancelling subscriptions.
“The Commission will continue to take action against misleading conduct such as subscription traps, and this is one of our current enforcement priorities,” Callinan said.
A Hello Fresh spokesperson said “HelloFresh acknowledges the Commerce Commission’s decision to commence proceedings related to alleged breaches of the Fair Trading Act 1986 until July 2023.
“The alleged breaches are in relation to reactivation of cancelled subscriptions where call centre staff did not follow our strict processes and procedures relating to the reactivation of cancelled subscriptions following offers sent to former customers.
“This practice fell well short of our standards and should not have happened. We sincerely apologise to any customers who were impacted or inconvenienced at the time. We have cooperated with the Commission’s investigation and took remedial action as soon as we became aware of the activities.
As this case is still before the Court, we’re unable to provide further details at this time”.
