Ex-finance boss now flogs ‘cheap’ cellphones
Aformer finance company director jailed for misleading investors has emerged as the boss of a direct marketing company accused of selling overpriced electronic goods to low-income people.
Mervyn Doolan is the head of Time2Buy, which touts itself as ‘‘New Zealand’s leading catalogue business ... providing all New Zealanders with a better way to own and acquire household and electronic goods in an affordable manner’’.
In 2011, Doolan was one of the first directors jailed as a result of the finance company sector collapse.
He was sentenced to two years, four months’ imprisonment for distributing false statements in prospectuses and advertisements for Nathans Finance, which folded in 2007 owing $174 million to 7000 investors.
It emerged that Doolan and other directors who were convicted were essentially using Nathans as a bank to fund a related vending machine business based around wireless technology that didn’t work.
At sentencing, Justice Paul Heath said the directors were guilty of ‘‘gross negligence’’ and the consequences were ‘‘massive, both in terms of financial and emotional harm’’.
Doolan was paroled after serving only about nine months. Time2Buy salespeople refer to him as ‘‘the boss’’ and ‘‘chief executive’’ but it’s unclear who owns the company as it is not listed under that name on the Companies Register.
Doolan is listed as director of only one registered company, Mane Floats, established in 2014, owned by his wife and described as a horse float retailing business.
Several disgruntled Time2Buy customers have told Stuff the smartphones and selfie sticks they received as part of a package deal were faulty and the firm didn’t return their calls and emails.
The Commerce Commission is assessing three complaints received about Time2Buy in the past two weeks.
When Stuff visited Doolan at his Palmerston North office, he said he was aware of complaints about one of his salesmen when he worked for another company several years ago but didn’t know of any recent complaints.
He said all Time2Buy products were under warranty and would be replaced if faulty. ‘‘If there’s any issues with phones we just replace them. We deal with them straight away.’’
Customers could call an 0800 number and Doolan said he checked emails himself. He declined to answer further questions.
Time2Buy has salespeople across the North Island who go door-to-door in low socio-economic areas offering package layby deals. No interest is charged, and customers receive the goods after making several payments. If they cancel after five working days there is a ‘‘cancellation fee’’ of around $175.
A popular combo deal includes a smartphone, a phablet – a device that falls between a smartphone and a tablet in size – a selfie stick and headphones for around $1400.
Stuff had the unbranded equipment assessed by staff at a reputable electronics store, who said similar phones and phablets could be purchased online for around $100 each and the selfie stick and headphones for about $20 each.
Napier grandmother Maria Crewther said a Time2Buy salesman came to her door in January and convinced her to sign up for the smartphone package.
‘‘You’re paying for the phone – the rest was ‘free’ – that’s how they suck you in. He said it was a fabulous phone.’’
She received the goods after three weekly payments of $30 and immediately had problems. ‘‘The phone wouldn’t ring out, I couldn’t make calls. My mokos laughed at me – they know what a cheap phone looks like.’’
She finally got hold of the salesman, she said, and he took the phone away to be looked at by technicians. She didn’t hear from him for weeks but was continuing to make payments.
‘‘He told me he’d lost the phone because he’d moved house, he’d found it and was going to send it to a technician. He’s always making excuses.’’
Crewther said she paid $210 in total but had now cancelled the payments and just wanted rid of the remaining gear.
‘‘I want my $210 back. I’ve sent emails to the company, there’s been no reply.’’
After Stuff asked questions, Crewther was visited by another Time2Buy salesman who apologised, took the products, and promised a refund.
Whaitiri Taiatini, of Flaxmere, had a similar story. ‘‘I usually send doorknockers away but I’d been without a phone for about a month and I really needed one because I was doing some online business.’’
She signed up for the combo deal, told the phone would be an LG V10.
After six payments she received the goods and was ‘‘so disappointed I wanted to cry. The phone’s probably not even worth $100, the performance is horrible’’.
‘‘I call it my ugly phone because noone would want to steal it. Sometimes you can’t hear [calls], I could be on Facebook and it will just shut down. The selfie stick doesn’t work at all, the phablet is slow. It’s a rip off.’’
Taiatini said she’s had no luck with her complaints. ‘‘Every time I tried to ring the company I had no answer – I tried emailing, but no reply.’’
She said she’d tried cancelling her payments but the bank wouldn’t let her because they were direct debits based on a contract. ‘‘I’d just like to quit payments right now, I’ve paid close to $500. It’s a dodgy business I’d say – with the products they’re giving, they’re terrible for the prices you’re paying.’’
Raylee Tameifuna said she bought a 40-inch television from Time2Buy for $1200 and was supposed to receive it after six payments, but it didn’t arrive. She couldn’t get hold of the salesman, but eventually got hold of an area manager who apologised and upgraded her to a bigger TV.
The salesman at the centre of the Hawke’s Bay complaints is Leon Thompson, who has worked in direct marketing for several years and been the subject of complaints in the past.
Thompson said the samples he’d tried worked fine, but he’d had a few complaints about faulty goods. He didn’t know where the electronic items were sourced from.
‘‘The products as far as we know are relatively reliable. I’ve tried and tested all of them. If the products have faults we try to get on to it pretty quickly – the last thing we want is unhappy customers.
‘‘Out of 100 units that I’ve seen go out, I’ve had less than 10 come back to me,’’ he said. ‘‘We provide all the New Zealand warranties and guarantees applicable. We’re a legitimate enterprise.’’
Thompson said he tried to return customers’ messages as quickly as possible but sometimes was out of cellphone range ‘‘and can’t get back to them as quickly as they’d like’’.
‘‘A lot of the customers we deal with tend to be middle to lower income people, a lot of them seem pretty short fused sometimes, especially if they don’t get their product on time.’’
He said often it was their own fault. ‘‘Some people lie and say ‘I’ve done my five payments, where’s my goods?’ When you go back and check the payment history they’ve bounced.’’
He said he’d been unable to address the complaints on the Facebook page because the moderator wouldn’t let him join. ‘‘It’s getting out of control and people are starting to make threats online. It’s getting ridiculous – I’m about to go to to police.’’