New Zealand Commerce Commission and the Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF) are urging Tongan shippers to raise diligence in light of a “long-standing shipping scam” outed by Kaniva News last month.
Our reportage described shippers in New Zealand, Australia, and the United States who agreed with freight-forwarders to “pay for freight and clearance” but the payment was not fully or at all passed on to carriers.
As a result, shipping companies and their representatives will withhold cargo release in Tonga until all outstanding fees are settled.
The cargo is then placed in storage, leading to extra charges. According to Tongan Customs regulations, it may be sold at auction after six weeks.
Kaniva’s report was featured in The New Zealand Shipping Gazette.
The paper contacted CBAFF for comment.
In her response, chief executive Sherelle Kennelly confirmed that such problems were not only affecting Tongan shippers.
“These cases highlight the vital importance of using reputable, transparent and compliant freight forwarding services,” Ms Kennelly told the Shipping Gazette™.
“We strongly encourage Tongan shippers, and indeed all importers/ exporters, to check if a freight forwarder is a CBAFF member. Our members uphold professional standards and are subject to our code of ethics, which is designed to safeguard both the industry and consumers from unscrupulous operators.
“We advocate for greater visibility and accountability across the sector to help identify and shut down rogue operators who exploit vulnerable communities.”
Ms Kennelly highlighted the following as among potential red flags to shippers:
• Lack of a physical business address in New Zealand or a proper company registration.
• Requests for large upfront payments without documentation.
• No transparent tracking or shipment information.
• Poor or no communication once the goods are shipped.
• Promises that seem too good to be true, especially around price or delivery timelines.
The Gazette reported that the Commerce Commission for competition, fair trading, and credit is aware that a Tongan company involved in the alleged scam was a subject of their inquiries in 2021 and 2022.
The Commerce Commission confirmed to the Shipping Gazette that the company was not currently under investigation by the agency.
At this stage, we have decided not to disclose the identity of that company.
Consumer Protection Guidelines Essential
According to Ms Horne, any form of consumer deception in marketing is generally a key focus for the Commerce Commission and may be considered a Fair Trading Act violation.
“All traders must ensure any representations made regarding a service, including the costs associated with the provision of that service, are accurate,” Ms Horne was quoted by the Gazette as saying.
“Before dealing with a company you haven’t bought from before, take a minute to research the business – look at online reviews and feedback on external websites to see if other people have had issues with delivery or with contacting the business.
“Remember that it can be hard to confirm if reviews on the company’s website are authentic and unbiased – a seller could promote false reviews or select only positive reviews to display on their website.”
Ms Horne said it was also important to take the time to read any terms and conditions relating to payment and delivery.
“Terms and conditions should detail what you can expect from a service and outline any additional fees.”
Affected consumers could seek remedy under the Consumer Guarantees Act (CGA), added Ms Horne.
“The CGA is self-enforcing, which means you can take your own action. If a guarantee is not met, you have the right to insist that the seller or service provider puts it right. For more information, go to the Consumer Protection website.
“While the Commission’s role is to enforce the Fair Trading Act, the Commission can take action if a business misleads consumers about their rights under the CGA.
“We encourage anyone who believes a business has breached the Fair Trading Act or one of the other laws we enforce to report it using the ‘report a concern’ form on our website.”
