Be savvy when tax agents come knocking
First it was truck shops; now the consumer watchdog has cold-calling tax agents on its radar amid rising complaints. Julie Iles reports.
Tax agents have been racking up an increasing amount of complaints to the Commerce Commission. A commission spokesman said the consumer watchdog had received twice as many complaints about tax agents last year than it did in 2015.
The commission this month warned Christchurch tax agency Savvy Tax for failing to meet its obligations for an ‘‘uninvited direct sale’’ (UDS).
Commission general manager Antonia Horrocks said if the phone rang or there was a knock at the door and consumers bought goods or services, they may have entered into an UDS, which came with its own set of legal protections for consumers.
Under the Fair Trade Act, phone and door-to-door salespeople must provide a copy of the written agreement to the customer at the time of the sale, the business’s contact details, and the total price.
The provisions only apply if the goods or services are more than $100 or – as is the case with tax services – the total cost is not known at the time of purchase.
Last year the commission received 31 complaints relating to uninvited direct sales, the spokesman said.
It received the first complaint about Savvy Tax in April last year.
The complainant claimed she was told Savvy Tax’s services ‘‘were free for the first time’’ and that its service was just a ‘‘check’’ unrelated to a tax return.
The complainant alleged that of the $497.69 tax refunded to her by the Inland Revenue Department in the past four years, Savvy Tax took $367.60 in fees.
The commission found that Savvy Tax did not give the customer a copy of the agreement at first and distributed brochures that did not contain information required by the Fair Trade Act, such as contact information, a description of the service, or a mention of the consumer’s right to cancel the agreement.
Horrocks said: ‘‘[Savvy Tax] would provide an agreement if a customer asked for one, but that is not sufficient.’’
Savvy Tax responded to the claim by changing its application form, but the commission did not consider the changes sufficient and issued a warning to the firm.
The door-to-door sales industry has become a big blip on the commission’s radar. Eleven mobile traders, also known as ‘‘truck shops’’ were prosecuted by the commission in the past year for compliance issues.
In a campaign to fight back against ‘‘dodgy door-to-door dealers’’, Consumer NZ has handed out half-a-million ‘‘Do not knock’’ stickers.
Consumer NZ chief executive Sue Chetwin said there should be better regulation to take legal action against door-to-door salespeople. ‘‘They do have those regulations in Australia, whereas in New Zealand you would have to sue them for trespass, which is not really satisfactory.’’
To her knowledge, no-one has ever successfully brought a trespassing case against a door-todoor salesperson.
Chetwin said consumers should keep in mind that there is a cooling-off period of five working days after buying something in an uninvited direct sale, so if the buyer has regrets about the fine print in their purchase, they could cancel the contract.
Otago University law professor Barry Allan said that in order to convict a person of trespassing, the homeowner or occupier must first serve the individual a notice that has identified the person by name.
Allan said common law states that anyone can come onto anyone’s property within reason, but that was ‘‘reversed’’ if there was a notice that said ‘‘invited guests only’’.
He said such notices were similar to Consumer NZ’S ‘‘Do not knock’’ stickers but would be more effective and clear.