HelloFresh New Zealand has been fined $845,000 for misleading consumers after admitting it reactivated cancelled subscriptions through cold-call voucher offers that weren’t clearly explained.
The campaign to reactivate lapsed memberships took place during an 18-month period between February 2022 and July 2023, when former HelloFresh customers were phoned and offered discount vouchers to return.
In many cases, the calls didn’t make it clear the offer would automatically restart their subscription and payments.
In the Auckland District Court today, Judge Catherine Maxwell sentenced the company an aggregate fine of $845,000 – apportioned $169,000 equally across five charges.
The Commerce Commission prosecuted the company on five charges under the Fair Trading Act. When the prosecution was filed in the Wellington District Court, it said the case highlighted “subscription traps” – where consumers were misled into ongoing payments as a key enforcement focus.
Commerce Commission lawyer Danielle Houghton told the court today that the HelloFresh campaign made 1.2 million calls, with 300,000 answering those calls and 77,000 customers were affected. The commission received 424 complaints.
“This was unique and serious offending in the Fair Trading Act context,” Houghton said.
"Consumers did not appreciate and did not consent to their subscriptions being reactivated.
"There is an inherent dishonesty in signing consumers up for a service they have not agreed to acquire.”
The sale tactic that's seen HelloFresh fined nearly one million dollars - Watch on TVNZ+
Houghton also noted cancelling the reactivated subscription required a multi-step online process with limited online support that "seriously aggravated the harm".
The lawyer for HelloFresh Peter Hunt today said "call centre staff may have gone beyond what they should have done" but customers received refunds and there wasn't any "long term or consistent harm".
“This was not an orchestrated campaign to mislead,” Hunt said, arguing that “rogue or over-enthusiastic” call-centre staff went off script and it was not a subscription trap.
“Refunds were readily given,” he added.
HelloFresh responds to $845,000 penalty
Tom Rutledge, CEO of HelloFresh Australia and New Zealand, responded to the sentencing with an "unreserved" apology to customers.
“HelloFresh New Zealand accepts today’s sentencing decision from the Auckland District Court relating to historical breaches of the Fair Trading Act 1986," he said in a statement.
"We unreservedly apologise to our customers, partners, employees and the wider community for the shortcomings in our past customer service practices.
Rutledge noted the events at the heart of the case occurred between November 2022 and June 2023. "We take full responsibility for them. At the time, some customers were misled by third-party and in-house call centre processes that fell well short of our standards.
"Since mid-2023, HelloFresh New Zealand has put measures in place to prevent this from happening again," he added.
"We ceased using the third-party call centre in question, introduced centralised complaint tracking, made changes to make cancelling an easier process online or in app, as well as solidifying our flexible subscription model with pause/skip functionality, mandatory quality audits, and strengthened compliance monitoring. Customers who were affected received refunds or credits, and we deeply regret the frustration caused."
Rutledge said the company was committed to "transparency and to rebuilding the trust of our customers, regulators, and the communities we serve.
"Our focus remains on providing excellent food and service, underpinned by the highest standards of compliance and customer care.”
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