HelloFresh New Zealand has been fined $845,000 after admitting it misled consumers into reactivating meal kit subscriptions without their clear consent.
The penalty follows criminal charges laid by the Commerce Commission, which found the international meal kit company breached the Fair Trading Act.
HelloFresh, which operates in 18 countries and is part of the largest meal kit company in the world, pleaded guilty to misleading thousands of former customers through an extensive call campaign that disguised sales efforts as feedback surveys.
Cold calls disguised as customer feedback
The Commission said HelloFresh agents phoned former customers claiming to be gathering feedback. In reality, the calls were designed to get customers to accept discount vouchers that would automatically reactivate their paid subscriptions.
Commerce Commission Deputy Chair Anne Callinan said the company’s actions were deliberate and widespread.
“This was a lengthy and widespread call strategy from HelloFresh where the company managed to reactivate almost 80000 customers’ subscriptions over the course of 18 months after attempting over one million calls to former customers,” Callinan said.
“We found that this misleading practice was embedded in HelloFresh’s business processes. This was not a one off issue.”
Consumer complaints ignored
The Commission received numerous complaints from customers who said they were charged despite saying they did not want to restart their subscriptions.
“After listening to a sample of call recordings, it is clear that agents glossed over or ignored customers who clearly stated they did not want to restart their subscription,” Callinan said. “These concerns were ignored, and we think that is unacceptable.”
Callinan said the case should send a strong message to other subscription based businesses.
“You need to be transparent about your terms and ensure customers are giving informed consent when signing up to your service,” she said.
Subscription traps a growing concern
The Commission said buying products and services through subscriptions is becoming more common, but so too are “subscription traps” where consumers are misled into paying for services they did not intend to buy.
Addressing misleading online sales practices, including subscription traps, remains one of the Commission’s enforcement priorities.
The case followed an investigation into HelloFresh’s conduct between February 2022 and July 2023.
Consumers who believe they have been misled by a subscription based service are encouraged to contact the Commerce Commission through its website.
