Disgusting behaviour by Tech Vault Enterprises Ltd, trading as HouseSmile.

 

HouseSmile fined $60,000 by District Court after taking advantage of elderly woman suffering from dementia

 

Tech Vault Enterprises Ltd, trading as HouseSmile, has been fined $60,000 for unconscionable conduct that involved repeated unsolicited sales calls to an elderly woman suffering from dementia.

 

The company has also been ordered to make a $7,500 payment for emotional harm.

 

Commerce Commission Deputy Chair Anne Callinan says the sentence sends a strong message that the Commission takes this sort of conduct extremely seriously and will pursue companies involved in such behaviour.

 

Unconscionable conduct is business activity that is a substantial departure from the generally accepted or expected standards of business conduct.

 

HouseSmile is a New Zealand-registered company that mostly sells household goods, such as electronics, exclusively on layby.

 

The company invited customers to contact it via Facebook advertisements or through its website. Its sales agents would then phone consumers, and would also make unsolicited calls to customers on its database.

 

“In this particular case, HouseSmile had been told by the victim's daughter that her mother was elderly, suffered from dementia and could not operate a computer” Ms Callinan says.

 

Despite agreeing not to contact the victim again, HouseSmile’s sales agents continued to contact the victim for over a year and a half to either make new sales or to restart previously cancelled sales for products including tablets, phones and Bluetooth speakers.

 

“The fact that the victim was contacted so frequently over an extended period of time, despite HouseSmile’s knowledge of her vulnerabilities, is highly aggravating,” Ms Callinan says.

 

“During these phone calls, HouseSmile's sales agents repeatedly engaged in conduct that was unconscionable by putting unfair pressure on the victim and trying to influence her decisions.”

 

This included, for example, telling the victim she was a “really good customer” who had paid the company “really well in the past”. In fact, this was not correct, as all her previous orders had been cancelled.

 

“The company also offered inducements such as free gifts or special deals, including as a $200 offer, or free credit,” Ms Callinan says.

 

HouseSmile’s sales agents would use what are known as ‘bait and switch’ tactics on the victim - initially suggesting a product would cost a lower amount to secure commitment to the purchase, then only clarifying the price was much higher at the end of a call. During these calls, HouseSmile often failed to disclose key information, such as product details or cancellation rights.

 

“In addition to this, HouseSmile’s sales staff ignored signs the victim was cognitively impaired, such as an inability to recall information like bank details” Ms Callinan says.

 

“The sales agents’ taking advantage of an elderly women with a serious cognitive condition is disturbing and clearly wrong at many levels.

 

“This sort of conduct is completely unacceptable, and businesses that employ such tactics should expect to be on the receiving end of enforcement action.”

 

Judge Marshall described HouseSmile’s actions as “egregious conduct” against one of the most vulnerable members of the community. The fine imposed would have been much higher but was discounted in consideration of the company’s financial circumstances, which led it to place itself into liquidation just a week before the sentencing.

 

The Commission has also recently filed charges against Brand Developers Ltd, trading as The TV Shop, in Auckland District Court.