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Every day, trucks piled with overpriced food and clothing cruise the poorer suburbs of Auckland and Wellington preying on vulnerable consumers.
The so called ‘mobile shopping trucks’ sell everyday goods at inflated prices to people who find it difficult to get to the shops or who are attracted by the credit they offer.
A Newsroom investigation by Sarah Hall found that the trucks were selling food items like 3kg packs of chicken drumsticks at $59 – five times the price the same amount would cost at The Mad Butcher.
Packs of corned beef (24 cans) cost $359 when the same amount could be bought at Countdown for $233.
Clare Dale, CEO of Ngā Tangata Microfinance, which specialises in offering micro loans to low income people, says the trucks are doing “huge damage” to the communities they are operating in.
Dale says people in South and West Auckland buy from the trucks because they often don’t have enough money for essentials and the credit offered is very tempting.
One of the mobile truck companies is reported to have 35,000 customers on its books.
Another turned over $22 million in revenue last year.
Kris Faafoi, the Commerce and Consumer Affairs Minister, described the food truck footage as “reprehensible”.
He said the behaviour of those operating mobile trucks – which preyed on the most vulnerable – would sit uneasily with most New Zealanders but unfortunately was relatively widespread.
“If you take a trip around my electorate (Porirua) and some of the areas of South Auckland they’re all over the show.”
Faafoi said the trucks would be part of a consumer finance review that would look at predatory practices. It is expected legislation will be introduced before the end of the year which will build on changes made in 2015.
Faafoi said the initial review would look at issues like high interest, debt collection practices, high fees, and door-knocking tactics.
He suggested one solution to the latter would be for ‘do not knock’ stickers to act as an automatic trespass notice to prevent people being pressured into unfair deals.
“At its most basic level the people that they are preying on need to know exactly what agreement they’re getting into, what they’re buying and what they’re going to be paying back. I don’t think even that basic disclosure is happening.
“The issue is these families are just in internal spirals of debt and cannot get out … I’d love to snap my fingers and do something about it immediately but I think what we’ve learnt from the 2015 experience is that we’ve got to have a good look at it.”
* This subject was proposed to Newsroom by Kiwibank, and investigated and produced independently by the Newsroom editorial team. Kiwibank is a partner of Ngā Tangata Microfinance, and a Foundation Partner of Newsroom.co.nz