Finance company fined for its part in toxic water claims investigation
Auckland based finance company Tiny Terms Limited has been fined $77,200 in the Auckland District Court today for its
part in the door to door sale of water filters by Love Springs Limited.
Tiny Terms provided finance for the purchase of Love Springs’ water filters. Consumers who agreed to purchase water
filters were signed up to 2 year rent-to-own agreements.
As a creditor Tiny Terms was required to disclose information about the terms of the contract to debtors and to do so in
a manner that could be clearly and easily understood. Tiny Terms failed to do this and as a result breached sections 17
and 32 of the Credit Contracts and Consumer Finance Act 2003. Tiny Terms also breached the Fair Trading Act by trying to
enforce these contracts where it had no right to do so because of its inadequate disclosure.
Between July 2009 and December 2010, Tiny Terms entered into a total of 21,523 credit contracts and each of those credit
contracts was for $1,595.
Commerce Commission Head of Investigations Ritchie Hutton said today’s sentencing sends out a strong message to both
consumers and creditors.
“It is important that consumers understand the cost of buying goods on credit. Creditors must provide information to
consumers about their credit contracts to help them do this and this information must be set out clearly. Where
creditors, such as Tiny Terms do not do this they can expect to face significant penalties.”
“This brings to a close a very successful investigation involving Tiny Terms, Love Springs and Phillip Smart,” said Mr
Hutton.
In December 2013, Love Springs and its director Phillip Smart were fined a total of $555,000 after Love Springs sales
staff were trained to sell water filters using deliberate marketing tactics that took advantage of people’s fears about
their health. As a result sales staff told consumers that local drinking water could cause cancer, birth defects and
miscarriages and was dangerous to people’s health.
ends