Selling furniture, phones and electrical goods online by instalment plan, Layaway Depot alleges competitor Buzz Value controlled by Simrat Kaur has stolen its 55,800 membership customer list and is poaching customers both with door-to-door canvassing and with cold calling from an India-based call centre named Buzz Value India. Buzz Value denies stealing confidential client information and says it is cutting links with Buzz Value India.
Buzz Value, the trading arm of a company called Oakmont Ltd, consented to an interim High Court order promising not to contact Layaway customers pending a full trial.
Layaway Depot Ltd started as a door-to-door sales company with retail stores in the upper North Island. Since 2017, it has operated online only. Layaway’s business model has customers purchase goods making payments by weekly or fortnightly instalments with delivery made after payment of a specified number of instalments. It is vulnerable to customers making no further payments after delivery.
Layaway became suspicious that its client transaction list had been stolen when customers reported being contacted by Buzz Value or Buzz Value India with sales reps who seemed to have detailed knowledge of their previous Layaway purchases. This extended to a cold call made to a Layaway executive who had previously made a dummy transaction, testing Layaway’s operating system. This dummy transaction left a database record as him being a Layaway customer. Layaway alleges Buzz Value staff have been telling customers that Layaway is now called Buzz Value and is having customers sign new bank authorities to redirect payments still due.
Layaway alleges Buzz Value is in breach of confidence, in breach of copyright as regards its customer transaction list and in breach of the Fair Trading Act. These claims are denied.
The High Court was told Buzz Value sales manager Gurpreet Singh previously worked for Layaway before being made redundant in February 2018 after Layaway stopped selling door-to-door.
Agreeing to the High Court interim order, Buzz Value said it was ‘no skin off its nose’ promising not approach Layaway customers. Buzz Value is adamant that it did not have, and never have had, access to Layaway’s customer records. Layaway has back-office operations in India with access to the company’s New Zealand database.
Layaway Depot Ltd v. Oakmont Ltd – High Court (17.02.20)
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