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Celebration Box may have breached Fair Trading Act, Commerce Commission finds

The Commerce Commission's investigation into Auckland giftbox company Celebration Box found that they may have breached the Fair Trading Act in multiple instances - but no legal action will be taken.

Celebration Box, which is run by Iyia Liu and Briar Howard, sells boxes filled with sweets while relying strongly on social media to promote their company.

Complaints were made to the Commission by customers last year, with numerous people saying they received boxes which were completely different to what they ordered, were late, or were of low quality.

Customers also complained that negative feedback left on Celebration Box's social media accounts was deleted, and that they were hesitant to provide refunds when asked.

A handful of the complaints made online about Celebration Box.
A handful of the complaints made online about Celebration Box. Source: Screenshots/Supplied

The Commission's investigation was completed last month, and 1 NEWS requested a copy of the Commission's compliance advice letter, which was sent to the company, under the Official Information Act. 

The Commission said in its letter that, in its view, Celebration Box had probably breached the Fair Trading Act (FTA) - but it stopped short of taking legal against them.

Companies that breach the Act can be fined up to $600,000, and individuals can be fined up to $200,000 for each offence.

Celebration Box's likely breaches related to providing boxes to customers which were substantially different to what they ordered, and misleading customers into thinking they were not able to get a refund.

A clause on the company's website displayed between July and December last year said "we do not offer cash refunds under any circumstances. Store credit may be issued".

The Commission said "CBL's terms and conditions in relation to cancellation contained information which was likely to mislead consumers by representing that there were no circumstances in which they could obtain a monetary refund for defective goods, when this was not the case".

The deletion of negative feedback was also considered by the Commission, which noted that such conduct could have "the effect of misleading consumers about the level of customer complaints (or satisfaction) CBL received," The Commission said.

Ms Howard last year said that Celebration Box, and especially Ms Liu, had been the target of significant malicious trolling over the past few months, including receiving death threats and racial abuse.

They responded to the Commission by saying they had only removed the feedback on the advice of Netsafe and Police.

The Commission warned that the FTA could also have been breach if "influencers are provided with product on the understanding they promote or endorse the product, and this fact is not clearly disclosed on any accompanying social media posts".

Celebration Box said while it did provide free boxes to influencers, it never instructed those people to post online about them.

Despite the likely breaches, the Commission decided it would not pursue the company through legal channels, and said the advice only constituted their opinion that breaches were likely to have happened - only a court could decide if there had actually been a breach.

"We have decided it is appropriate and sufficient to conclude our investigation by issuing compliance advice," the Commission said.

"The changes that Celebration Box made have been factors in the Commission deciding to issue compliance advice on this occasion."

However, the Commission also warned: "you should be aware that we will consider the compliance advice history of a trader, if we receive further complaints".

The company responded to the Commission's investigation by saying they had grown more quickly than expected, and for periods had struggled to keep up with demand, but have now made numerous changes to their systems and practices to better comply with the FTA.

Ms Howard told 1 NEWS: "It has been almost a year since the launching incident that happened.

"Just like any new business we had to make early changes, ours were unfortunately publicised and received a lot of attention and we are very sorry for the incident that occurred almost a year ago.

"We have made successful changes that are inline with the fair trading act and run a fully legal operation.

"The logistical operation of our business is smooth, we have amazing trained staff and have sent out around 30,000 boxes to which have made a lot of people happy.

"We will continue to grow and make changes as need be, however for now we are very happy with our product, systems and how we operate."

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An image posted on Instagram by Iyia Liu, left, and a screenshot of Celebration Box products, pictured right.
An image posted on Instagram by Iyia Liu, left, and a screenshot of Celebration Box products, pictured right. Source: Iyia Liu/Instagram/Screenshots