Meal kit delivery service HelloFresh has admitted guilt to five counts of misleading customers.
In March, the Commerce Commission filed criminal charges against HelloFresh New Zealand for allegedly misleading consumers during cold calls intended to reactivate customers who had previously cancelled their food delivery service.
Commerce Commission deputy chairperson Anne Callinan said HelloFresh NZ offered discount vouchers to some former customers without making it clear that using the voucher would restart their subscription.
The allegations cover the period from February 2022 to July 2023.
At Auckland District Court, the company confessed to violating the Fair Trading Act. In particular, it breached a provision that prohibits misleading conduct concerning services.
“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,” Callinan said in a previous statement.
“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.”
HelloFresh is scheduled to be sentenced on October 16 for its “subscription trap” practices.
The Commerce Commission is required to submit its sentencing submissions by 5pm on September 22, while HelloFresh must file its submissions by 5pm on October 7.