Gateway fined under Fair Trading Act

International PC vendor Gateway has been fined $21,500 by the Auckland District Court for breaching the Fair Trading Act.

International PC vendor Gateway has been fined $21,500 by the Auckland District Court for breaching the Fair Trading Act.

The company ran afoul of the act by describing compulsory additional costs in small print only.

In court on Monday, Gateway admitted that its advertising was misleading. It listed compulsory delivery costs in small print only. Customers could not buy computers at the prices advertised as they always had to pay an additional $45.

Commerce commission chairman John Belgrave said, “Misleading claims like those made by Gateway can harm consumers in two ways. First they are likely to be induced to purchase by misleading claims about the total cost. Secondly, they are unlikely to be able to accurately compare competitor’s prices. And this second point also harms competitors – they may lose sales to a rival making misleading claims.”

Gateway is one of several IT companies to be pulled up by the commission this year.

In September the Auckland District Court fined Cogent Communications, trading as Hart Candy, $7000 for breaching the Fair Trading Act. The court said Hart Candy did not disclose compulsory additional costs and conditions for Telecom "Go Prepaid" cellphone packages on its website.

The extra costs were displayed in store but the court ruled that the website claims were misleading and unlawful and had enticed customers into the company's Grafton store. Australian firm Starworks was also prosecuted for advertising PCs in New Zealand it could not supply.

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