High prices, predatory lending ‘rampant’ in mobile shopping industry

Long Lunch 18/04/2018
Photo: Getty

Mobile shopping trucks have been accused of "preying on the vulnerable” for charging excessive prices for food and household goods.

Darryl Evans of Mangere Budging Services Trust has claimed that he’s seen markups of 500 percent, and that the trucks hook in the poor with offers of no-interest repayments.

Mr Evans has cited laptops at the beginning of the school year sold for four or five times the retail price and loaves of bread from the Warehouse sold for $4 or $5, instead of the usual $1.

He's been fighting the presence of the trucks, which he calls "piranhas", in the suburbs he works in for years.

Home Direct owner and chief executive Michael Wright told RadioLIVE that compliant business shouldn’t be lumped with the ‘cowboys’ who take advantage of people.

“Yes, there are absolutely some cowboys in this industry,” he said.

Home Direct has mobile stores all around New Zealand, including Auckland, Hamilton, Wellington and Christchurch.

Mr Wright joined Wendyl Nissen on The Long Lunch to respond to the investigation launched by Newsroom.co.nz.

“[The Newsroom video] absolutely highlights some critical issues which are going on within the mobile shopping industry,” he said.

“And these are concerns around high prices, cycles of debt, predatory lending and selling practices,’ Mr Wright said. “I think all of those are issues which are rampant in the mobile shopping space."

... There are absolutely some cowboys in this industry.

But he assured RadioLIVE that Home Direct completes doesn’t target specific demographics and they complete thorough credit checks on all its customers.

Mr Wright also claimed that the Home Direct interest rate is comparable, if not better, than reputable establishments like Harvey Norman.

“We’re really conscious that bad publicity and poor trade practices from those non-compliant cowboys reflects badly on the wider retail solution that we’re providing…”

Consumer Affairs Minister Kris Faafoi aims to tackle the issues around mobile shopping trucks this year.

“I am extremely concerned about predatory and irresponsible lending practices on vulnerable people,” he told Newshub.

The trucks will be part of a consumer finance review, Mr Faafoi said. It's expected to consult on debt collection methods, interest rate caps and false and misleading claims.

There were 40 companies operating mobile trucks in 2015, according to the Commerce Commission.

Listen to the full interview with Michael Wright above.

The Long Lunch with Wendyl Nissen, 12pm - 3pm on RadioLIVE and streaming live to the rova app on Android and iPhone.


EDIT: This story originally stated that "There were 40 companies operating mobile trucks in 2015, according to the Commerce Commission." This insinuated there are currently 40 companies operating in 2018. We've since corrected this for clarity.