Noel Leeming Group Warned For Making Delivery Representations Without Reasonable Grounds During COVID-19 Lockdown

Noel Leeming Group has been warned by the Commerce Commission for making delivery representations about two products which, in the Commission’s view, it did not have reasonable grounds for at the time the representations were made.

The warning follows a Commission investigation after receiving over 100 enquiries about Noel Leeming Group (NLG). The enquiries were from consumers including those who had not received products within the delivery timeframes NLG had represented, were experiencing difficulties contacting NLG to discuss the delivery delays and were not receiving a refund for delayed deliveries when requested.

In the Commission’s view, NLG is likely to have breached the Fair Trading Act by accepting payment for 37 Amazon Kindle 4GB 2019 products on 5 and 6 April when it had no remaining stock to fulfil these orders. NLG removed this product from sale on 6 April, then informed its customers of the situation and offered a refund on 16 April.

The Commission also considers that NLG is likely to have breached the Fair Trading Act on 26 June and 2 July by advertising a DJI Ronin-SC Control Cable with a 1–2 week time frame for expected delivery despite having an overdue existing order and not taking any steps to establish with its supplier the reasons for the delay, availability of the product or expected delivery time frames.

Commission Chair Anna Rawlings said, “Noel Leeming Group faced unprecedented consumer demand and delivery services were significantly impacted at this time. However, it should have taken a more cautious approach to representations it made about product availability and delivery time frames”.

During the changing COVID-19 Alert Levels consumers had reduced ability to shop around for available or alternative products. “Consumers were, therefore, heavily reliant on representations about availability and delivery times,” said Ms Rawlings.

NLG has fully co-operated with the Commission’s investigation. It has advised the Commission that it has since amended its approach to delivery representations.

The warning letter has been published on the Commission's case register.

Background
Warning letter
A warning explains the Commission’s opinion that the conduct at issue is likely to have breached the law. It is not a finding of non-compliance – only the Courts can decide whether a breach of the law has occurred.

The purpose of a warning letter is to inform the recipient of the Commission’s view that there has likely been a breach of the law, to suggest a change in the recipient’s behaviour and to encourage future compliance with the law.

The relevant law
Section 12A2 of the Fair Trading Act prohibits the making of unsubstantiated representations, i.e. where the person making the representation does not have reasonable grounds.

Section 21(c)3 of the Act prohibits the acceptance of payment for goods unless that person has reasonable grounds to believe that they will be able to supply the goods within a specified time, or if not specified, a reasonable time.

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