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The company behind a controversial $100,000 promotional cash-drop event in Auckland could face charges of up to $400,000 if it is found to have acted unfairly.
Greenback Ecommerce Ltd, trading as The Safety Warehouse, is now being investigated by the Commerce Commission after Saturday's cash drop event, where some of the money turned out to be vouchers for its online store, printed to look like $5 notes.
Police investigated complaints but transferred the matter to the Commerce Commission.
Consumer New Zealand chief executive Jon Duffy told Newstalk ZB's Mike Yardley that the company may have breached Section 17 of the Fair Trading Act.
"The way this was promoted, created an expectation that the company could never live up to," Duffy said today.
"Whether you argue the expectations of the people attending were reasonable or not, it's hard to deny that people turned up and were confused as to what was going on, and the company needs to take responsibility for that."
Safety Warehouse insists $100,000 in real money was used, and $40,000 worth of vouchers, but Duffy said the inquiry would establish exactly how much cash was on offer, how it was distributed to the crowd, and the intentions behind the stunt.
"They have to intend to follow through on the promotion that they've created - and if they haven't, they could be committing a criminal offence."
Duffy said unfair practices might not be the only potential charge.
"There is still the question around how closely the vouchers resemble a genuine $5 note so they could still be in some trouble there."
Surprise turned to anger in Aotea Square as the crowd of up to 1000 people realised they weren't picking up real cash. Bottles were thrown at a Safety Warehouse vehicle, and a staff member was taken to hospital after glass from the shattered rear window went into his eyes.
People travelled from out of town in the hopes of grabbing some extra money, and others have started a petition to change the vouchers into real cash.
Duffy said the Commerce Commission usually wouldn't respond this quickly to the four complaints already laid, but this was a situation with high public interest.
"Particularly with a lot of people struggling at the moment at the lower end of the socio-economic spectrum and this promotional type of material being targeted at those groups that are more vulnerable - that's probably spurred the commission to act quicker."
Safety Warehouse managing director Andrew Thorn has said in a statement the event had been "unfairly characterised" as an event with fake money, when real funds were given away as anticipated.
Thorn said the company had "no intent to deprive, mislead or embarrass" anyone.
The lookalike vouchers were used at a Hamilton bar over the weekend.
After reviewing the event, Auckland City Police Inspector Scott Gemmell said no evidence of criminal offending has been identified from the information received. Gemmell said they have forwarded the complaints to the Commerce Commission for further review.
A Reserve Bank spokesperson says publishing a genuine banknote or coin which could be mistaken for the real thing may breach the law, and anyone presenting a counterfeit note is committing an offence.
Retailers who accept counterfeits should lay a police complaint and hand over the accepted fakes and any video evidence. They lose out unless awarded reparations from the criminal through a legal process.