Commission warns electronics retailer Becextech over fair trade breaches

Thursday, 28 May 2020

If you can't back it up, don't say it. First published in 2020.

Online electronics retailer BXT International has been given a warning letter by the Commerce Commission.

In a letter, the commission outlined its belief that the company, under the name of Becextech, had breached the Fair Trading Act.

The warning followed a commission investigation into the Hong Kong-based company, which sells electronic goods such as mobile phones, computers, tablets, and digital cameras through its website.

The commission said Becextech had likely breached the Fair Trading Act by failing to clearly disclose that some mobile phones it was selling were refurbished.

* Jeweller Michael Hill fined $169,000 for misleading customers about price

Commerce Commission commissioner Anna Rawlings said retailers must not mislead consumers.

* PB Tech fined $77,000 for extensive failings with customers’ extended warranties

* Online phone store warned for advertising discounts it couldn’t back up

This meant customers believed that they were buying new mobile phones at discounted prices.

Becextech was also selling extended warranties that did not contain the mandatory information required to be disclosed to consumers by the Fair Trading Act, the commission said.

The Commerce Commission says Becextech failed to tell customers that some of the phones it was selling were refurbished, not new.

Commission chairwoman Anna Rawlings said consumers were protected by law against advertisements that created misleading impressions about a product’s features and previous use.

“Like any trader carrying on business in New Zealand, Becextech must comply with the Fair Trading Act and ensure they are not misleading consumers,' she said.

“That includes not giving a misleading impression that products are new if, in fact, they are refurbished, and complying with mandatory requirements when selling extended warranties. It is the commission’s view that Becextech failed to do this.'

In the letter, Becextech was also warned about making unsubstantiated and false or misleading representations about the price of products by representing certain items as being available at discounted prices and 'on-sale' without having reasonable grounds to support the level of discount claimed.

“Consumers need to be able to rely on the accuracy of business’s claims. Specials and deals need to offer consumers genuine savings when compared with the price they might ordinarily expect to pay and products should not be promoted in ways that entice customers to buy under false pretences,” Rawlings said.

A warning letter from the commission flagged concerns for businesses but it was up to the courts to decide whether a company was guilty of breaching the law.

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