Vector-owned HRV Clean Water has been fined $440,000 for misleading consumers on the level of chemicals in the nation’s water supply and overstating the benefits of its water filter system.
The claims were made by HRV between July 2014 and October 2017, pre-dating Vector’s ownership. The company pleaded guilty to 11 charges under the Fair Trading Act in June and was sentenced by Judge John Macdonald in the Auckland District Court last week.
The Commerce Commission said HRV didn’t have reasonable grounds to claim its filter could soften water, and relied too much on information provided by a supplier without expert verification.
“Although HRV had some testing done, the results did not provide a reasonable basis for the various claims it had made – and continued to make – about the benefits of using the filters,” commissioner Anna Rawlings said in a statement.
“The onus is on traders to ensure that they have the information they need to back up the claims they make and that they do not overstate the need or potential benefit of their products or services,” she said.
In December 2013, a separate water filtering company also got into trouble making unsubstantiated claims about its filtered water. Love Springs and its director Phillip Smart were fined $555,000 for sales tactics which included telling consumers that local drinking water could cause cancer, birth defects and miscarriages.
A finance company which helped consumers buy the Love Springs filters was fined $77,200.
Fair Trading Act breaches attract fines of up to $600,000 for companies and $200,000 penalties for individuals. These penalties are now significantly lower than those under Australian Consumer Law, where recent changes mean companies can be fined up to $10 million, or three times the value of the benefit received, whichever is the bigger number.
Vector acquired E-Co Products Group, better known as home ventilation firm HRV, and solar installer PowerSmart in 2017 for a combined $91 million as a means to further broaden its energy services.