22 LISTENER AUGUST 24 2019
The rort involved Hong Kong-based com-
panies deliberately undervaluing imported
goods so as not to pay GST at the border.
Trade Me had been told about it months
before, but chose not to take UDS Mart and
other alleged lawbreakers off its platform. It
banned UDS Mart only after Customs confis-
cated packages worth as much as $120,000
from 100 or so UDS Mart customers.
Even then, Trade Me – bought by British
private-equity firm Apax Partners for $2.56
billion in May this year – didn’t tell cus-
tomers what was happening. Instead, when
cameras and smartphones didn’t reach their
intended recipients, buyers didn’t know
why. In late June, people started contact-
ing UDS Mart and Trade Me, but didn’t get
any joy. They talked on message boards,
comparing stories, speculating.
CUSTOMERS BACK CUSTOMS
As the dust settled, Customs officers started
taking part in comment feeds, explaining
they were holding people’s cellphones and
camera equipment – and why.
Then a strange thing happened. People
started commending Customs, which could
have been seen as the baddie – it was, after
all, holding the goods. And they started slat-
ing Trade Me.
As one thwarted buyer wrote: “We are allever so grateful to NZ Customs for sorting
this mess out ... hope it never happens again.
Trade Me, please be more vigilant in respect
to these sort of traders. I’m certain this dis-
honest trader could have been noted sooner.”
And another one: “I’ve been asking Trade
Me for a refund for more than a week now.
Still haven’t heard anything from them
except for the auto-generated emails. I’m
guessing they are waiting to see if, indeed,
UDS has sent my orders. But even so, a
simple email from them would be nice to
let me know what’s happening rather than
just guessing.”
There are plenty more like that. “It’s
probably a wake-up call for buyers
who thought TM was a safe place
to buy a higher value item when
that item is coming from over-
seas,” says a third buyer.
“Trade Me was warned,
shown evidence this seller
was breaking the law, they
were asked to remove them
and Trade Me said ‘No, not our
problem’,” says another.
But there is some (albeit
backhanded) support for
GST CRACKDOWN
the marketplace: “Some of us are saying that
Trade Me only did what many buyers did –
namely, look at the warning signs and close
their eyes – so it’s a bit rich for the buyers to
now say it’s all Trade Me’s fault.”A SIMPLE SCAM
Still, the frustrated-with-Trade Me narrative
is one that rings true with Gerard Emery.
He’s the chairman of the Photographic
Imaging Association, and the spokesman
for a group of self-appointed local crusaders
who have been battling for more than two
years to create a level playing field for their
own businesses by getting the GST avoiders
shut down (Listener, June 22).
When Emery and his colleagues did their
own investigations, starting in 2017, they
discovered a relatively simple scam. UDS
Mart and others falsified Customs invoices
so that an expensive camera, for example,
was declared as a cheap bit of photographicequipment. As long as the falsified Customs
declaration was for less than the legal GST
cut-off of $400, they weren’t asked to pay
the tax.
And because Customs can open only a
tiny proportion of the millions of parcels it
handles, no one found out that what was in
the packages and what was on the declara-
tions were quite different things.
The scam was uncovered when Emery
and others started buying camera equip-
ment themselves. Their investigations
proved what they had only suspected
before – UDS Mart was dodging GST.
On every package they bought.
But when Emery went to
Trade Me to ask for UDS to be
delisted, Trade Me refused to
act.
“It’s not our place to
determine if they should
or should not pay duty,”
says Trade Me head of
marketplace, audience and
payments, Stuart McLean. “Werun the marketplace. It’s Customs’ job to
collect duty.”
McLean’s former colleague Rick Davies
previously commented that “Trade Me
can’t be judge, jury and executioner”
about whether a company is fulfilling its
tax obligations.
McLean says after the complaints, Trade
Me contacted UDS and asked the Hong
Kong company to explain. “We had numer-
ous conversations and we were given a
reassurance it would change. We believe
we did everything in our power.”
Emery doesn’t agree. He says Trade Me’s
rules for sellers on its platform include tell-
ing them to “keep it honest and legal” and
that “advertised prices must include GST
and [sellers] are responsible for [their] taxes”.
He says any seller not paying New Zea-
land taxes is breaking the law, and that
the camera retailers gave Trade Me proof
months before the Customs sting that UDS
Mart wasn’t paying GST. Trade Me took no
action.TRADE ME REACTS
McLean says his company acts “on what gov-
ernment agencies tell us, not individuals”.
“There were no red flags for us until non-
deliveries started to happen, and we acted
very quickly after we knew non-deliveries
were coming through at an increased rate.
We took them down that day.”
Trade Me also banned a company called
Blitz Tradings, which launched with suspi-
ciously similar listings soon after UDS Mart
disappeared.
McLean says Trade Me will refund anyone
who didn’t receive their goods under its
buyer-protection policy. In fact, Tarun Ahuja
received his money back late last week.
Still, Ahuja says, it took almost three
weeks from people first complaining about
not receiving their cameras and phones to
when Trade Me blocked UDS Mart’s listings.
And, all that time, more New Zealanders
were buying phones and camera equipment.
“The negative feedback goes through to
June 27, but Trade Me allowed the store to
function on its platform until July 17.
“It’s hard to think there isn’t something
going wrong there.”
Emery says issues with online retailers
aren’t anything new; the important thing
is for sites such as Trade Me to act quickly.
He says international price-comparison site
PriceSpy investigated camera listings from
two other concerning sites after being sent
Trade Me’s Stuart McLean. evidence from New Zealand retailers. One“The camera retailers
gave Trade Me proof
months before theCustoms sting that UDS
Mart wasn’t paying GST.
Trade Me took no action.”