The Commerce Commission has filed criminal charges against HelloFresh New Zealand, alleging the company misled consumers in cold calls used to "re-activate" customers who had cancelled the food delivery service.
The claim relates to conduct between February 2022 and July 2023 when previous HelloFresh customers were offered a discount voucher without it being made clear that acceptance of the voucher would reactivate their subscription.
Commerce Commission Deputy Chair Anne Callinan says the Commission believes that Hello Fresh breached the Fair Trading Act as the conduct resulted in 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," Ms Callinan says.
"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 offered, 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," Ms Callinan says.
The Commission started an investigation into HelloFresh after receiving a high number of complaints about its sign-up, cancellation, and reactivation processes. The charges were filed in Wellington District Court.
