The Act applies to a wide range of activities.  Its primary focus is on anyone in trade – from a bank, hotel or department store through to the local plumber or corner dairy.  It applies to all aspects of the promotion and sale of goods and services – from advertising and pricing to sales techniques and financing.  Businesses cannot contract out of their obligations under the Act.

The Act also applies to certain activities whether or not the parties are ‘in trade’ – such as employment advertising, pyramid selling, and the supply of baby walkers, cots and bicycles covered by product safety standards regulations. 

The Commission is responsible for enforcing the Act, but anyone – consumers and businesses alike – can rely on and take their own legal action under the Act.

In most cases it is not relevant whether a business intends to deceive or mislead, the issue is whether its conduct is liable or likely to deceive or mislead.  Equally, someone does not need to have suffered or been directly affected by the behaviour of a business for there to have been a breach of the Act.

Both businesses and individuals can be prosecuted for breaching the Act.  When the Act is breached by a staff member, the company they work for can be held liable.  The managers or directors, or anyone else, cannot simply say ‘staff acted without permission’, even if that statement is true. 

Likewise, where a business acts unlawfully, its directors, managers, agents and employees, as well as anyone else involved in the offending conduct – such as wholesalers or retailers – can all be held liable. 

A business making claims about products it supplies must remember that its audience will include those who may be gullible, of less than average intelligence or poorly educated.  Some people, by reason of age, language difficulties or lack of education, can be more easily misled than others.

The Fair Trading Act:

• prohibits people in trade from engaging in misleading or deceptive conduct generally;
• prohibits certain types of false or misleading representations about employment;
• prohibits certain types of false or misleading representations about goods or services;
• prohibits certain types of false or misleading representations or conduct in relation to land;
• prohibits certain unfair trading practices; and
• provides for consumer information and product safety standards regulations and unsafe goods notices.