A clothing retailer has been slammed by customers who say they've waited months for items to turn up, while Consumer NZ has launched an investigation into its refunds policy.
At the same time, the brand is facing criticism on social media about the authenticity of its ethics and sustainability claims.
The company owners stand by their products and reject the allegations, saying they've been the subject of a smear campaign.
Registered in June 2019, Shekou New Zealand sells trendy clothing and accessories, online and in an Auckland shop, marketed towards young people.
The brand, founded by Auckland couple Brianna Ellin and Joshua Mittendorff, has 800,000 followers on TikTok and more than 250,000 on Instagram.
But some customers are not happy about shipping delays and what they say is a lack of transparency around sustainability.
Consumer NZ head of research Jessica Wilson said they had been investigating Shekou New Zealand since the beginning of this year.
"We've been getting complaints from unhappy customers who've paid for goods and kept waiting months for them to turn up, and being sold by the store they are not entitled to a refund. We have also been told that the Commerce Commission has fielded around 16 complaints about Shekou," Wilson said.
"We're really concerned that consumers are being told they can't get a refund when that conflicts with the rights they have under the Consumer Guarantees Act. You don't have to keep waiting for a product if the retailer doesn't get it to you on time or within a reasonable time then you're entitled to ask for your money back you don't have to keep waiting."
Retailers who mislead consumers about their refund rights breach the Fair-Trading Act and risk a fine of up to $600,000.
Consumer NZ said one customer they spoke with purchased $170 worth of clothes in November of last year but when the parcel arrived in February a $34 dress was missing.
"She had approached the company about this but didn't get a satisfactory response. We also contacted the company back in April asking why this woman hadn't got her refund. It's taken until just in the last couple of days for a refund to finally be provided to this customer."
First Up spoke with another customer who waited four months for an item, and when it finally arrived a large hole appeared in the garment after she wore it once.
"That doesn't really meet the requirements of the Consumer Guarantees Act, so I informed them of it and requested a refund and they out rightly refused to give me one and said they were kind of within their rights not to give me one, but you know, I stated my rights and they still refused to give me one, so I'll actually be filing a report with the Commerce Commission."
The customer, who asked not to be named, said Shekou New Zealand's customer service was not good enough.
"Over the period of the four months trying to receive my order, I constantly emailed them asking for updates and the only update they provided me was that Covid-19 delays were causing things to be longer in shipment, so there were really blunt replies and really limited in their response and they did take a while to respond to me each time as well.
"And then once the sweater had arrived and I was kind of concerned about the hole in it and asking for a refund, the replies were also really blunt and just like factually incorrect, according to the Consumer Guarantees Act and just saying, you know, like we're not giving you a refund."
Consumer NZ said Shekou New Zealand's terms and conditions state customers can't cancel orders and get a refund once their payment's been processed. The company's website itself has different refund policies for instore and online purchases.
But Ellin and Mittendorf said Consumer NZ had mistaken its change of mind cancellation policy for delivery issues.
They said they did have to provide a refund if customers change their mind, if their circumstances changed or if they found a product cheaper anywhere else but they would provide a refund if there is a breach of the Consumer Guarantees Act like a delivery issue.
Shekou defends itself
First Up visited Ellin and Mittendorf at their Auckland office earlier this week to put the allegations to them.
"Covid has had obviously a huge impact on especially international freight and it's ongoing as well," they said.
"We've had a disclaimer on our website for probably about a year now saying that, like all of our shipping lines are experiencing Covid delays, like when you go through checkout and in brackets it'll say in bold 'experiencing Covid-19 delays'.
"So a consumer actually has to physically select the shipping option that says in brackets experiencing Covid-19 delays."
But Shekou New Zealand was also facing criticism from customers and Consumer NZ over its claims about ethics and sustainability.
On its social media accounts Shekou New Zealand said it made approximately 30 percent of their clothing from sustainable materials which were certified by external organisations.
Ellin and Mittendorf insisted the claims were correct and showed First Up documents confirming their fabric mills in China meet ethical and sustainability standards.
The issue, Ellin said, was that they were not allowed to post the certification documents online.
"As per a lot of these companies' policies, it actually says here please remove the certificates of the pictures from your website.
"We used to have them on our website. Reprieve told us to remove them as they see here, we're worried that the information will be used by other customers and cause unnecessary troubles. So, these companies don't actually allow you to publish these certificates, hence, we have removed them from our website. We actually did have them on our website.
"It's like a double-edged sword that we're facing, I mean, on one hand consumers want transparency, but these certification bodies are like 'do not distribute the certifications', so I'm not sure … it's a catch 22. What do you do?"
Ellin said whilst the business' fabric mills were certified, their individual products were not, and that had led to some confusion.
"The fabric we use is certified by these certification bodies, which we have all the certification for. So basically we buy a fabric from around three eco-friendly fabric factories which are fully certified and for a brand to then get certified as a partner mill is quite a difficult process.
"But that's not to say that the fabric isn't certified. That is a process you can go through - it's a very lengthy process to get everything individually certified. We haven't done that yet. We thought that this was sufficient, but that is definitely something we're going to do going forward to ensure that there's absolutely no confusion. "
Heading to court?
Shekou New Zealand is currently threatening to take Instagram influencer Danielle Duncan to court.
The couple said she had spread misinformation about their company and that they were the subjects of a calculated smear campaign.
Duncan declined to be interviewed but, in a statement to First Up, said researching and creating conversation regarding the sustainable and ethical fashion industry was something she was very passionate about.
"Encouraging consumers to think about where they shop is something I do regularly, and I have absolutely no personal vendetta against any particular brand. I think it's incredibly important for brands to be transparent about the way in which they practice and will always speak up when it comes to this matter."
Not the first time
It was not the first time Ellin and Mittendorf's business practices have been called into question.
In 2017, the couple raised $76,000 on the crowdfunding site Indiegogo to create a portable espresso machine called Portaspresso.
However, four years later, the 300 people who contributed money are still waiting for the product to go into production.
Ellin and Mittendorf told First Up they were refunding backers who no longer wanted to wait for the product.
"We basically publicly said that anyone who wants a refund is able to have a refund, but I think we've issued $35,000 in refunds, so probably about half."
Consumer NZ said another of Ellin's companies, Luna and Lucifer, has also been the subject of complaints about poor customer service and shipping delays, but it has been told any issues have been rectified.
Mittendorf said whilst they were still learning, the business strove to meet the highest ethical standards
"Not only do we manufacture our clothing, we also source all our packaging you know on the clothing, down to the zips, the buttons, we source and manufacture all this ourselves … we can trace back where this stuff came from."
Shekou New Zealand said it would look at ways to further improve its business in the future.