Fair Trading Act fact sheets

The Commerce Commission publishes factsheets for businesses and consumers wanting to better understand their obligations and rights under the Fair Trading Act.

In an effort to help your business comply with the Fair Trading Act, the Commission has produced the DVD An Evening with the Fair Trading Act and other compliance resources, to be used as part of your compliance programme.

To order a DVD contact the Commission at contact@comcom.govt.nz or watch the DVD on the Commission's Youtube channel at www.youtube.com/commercecommission.

Note: a number of changes have been made to the Fair Trading Act since this DVD was produced. The penalties mentioned in the DVD are no longer correct – read about the new fines from June 2014. Additional provisions have also been introduced which are not included in the DVD, more information on these can be found in our fact sheets – unsubstantiated representations, uninvited direct sales, buying and selling online, and layby sales.

An overview of consumer rights can be found in our Know Your Rights factsheet.

Other guidelines cover:

These publications are guidelines only, and reflect the Commerce Commission's view. They are not intended to be definitive, and should not be used instead of legal advice. Only the courts can make an authoritative ruling on breaches of the Fair Trading Act.

Electricity and the Commerce Commission's role

This page gives an overview of the Commerce Commission's role in the electricity industry. It is designed to give consumers an understanding of what we can and can't do under the Fair Trading and Commerce Acts.

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What is the Fair Trading Act ...

... and how does it affect me?

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Add-ons and hidden fees

You must clearly identify the full cost to purchase a product or service, so that consumers can make an informed decision whether to purchase.

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Bait advertising

Businesses which advertise goods or services at a particular price must supply those goods or services at that price for a reasonable or stated period and in reasonable or stated quantities.

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Buying and selling at auction

This fact sheet is intended to help consumers, sellers (vendors) and auctioneers understand their rights and obligations under the Fair Trading Act and Consumer Guarantees Act when buying or selling at auctions conducted by auctioneers.

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Buying and selling online

This fact sheet is designed to give anyone who buys or sells online an understanding of how the Fair Trading Act and Consumer Guarantees Act apply to the transaction.

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Buying goods and services in New Zealand

Anyone buying goods or services in New Zealand is protected by consumer laws. As a consumer, it's important you know your rights.

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Claiming you're something you're not

Any claims made to bolster the image of a business or its products or services must be accurate.

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Comparative advertising

If you are comparing your product and price with a competitor make sure you are comparing like with like.

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Contracting out of the Fair Trading Act

This fact sheet provides an overview of the new provisions on contracting out of the Fair Trading Act. It explains the situations in which businesses can and cannot contract out of the Act.

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Debt collecting

There will be times when customers do not pay on time for the goods or services provided. When a business, or a collection agency working on its behalf, seeks to recover debts, it must take care to comply with the law.

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Door-to-door and telemarketing sales

This fact sheet provides an overview of the new uninvited direct sales provisions under the Fair Trading Act. It is intended to help consumers and businesses understand their rights and obligations in relation to door-to-door and telemarketing sales.

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Environmental claims

Environmental claims are increasingly used as a point of difference in marketing. It is an area in which consumers can easily be misled. You should be able to substantiate any environmental claim you make.

Also see Guidelines for Green Marketing (PDF) and Guidelines on Carbon Claims (PDF).

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Extended warranties

This fact sheet provides an overview of the new extended warranty provisions under the Fair Trading Act. It is intended to help businesses and consumers who enter into extended warranty agreements understand their rights and obligations, particularly as they relate to the Consumer Guarantees Act.

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Fine print

The overall impression on a potential customer is important. Fine print shouldn't change the main offer in any way, or be used to conceal important information.

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Health and nutrition claims

Consumers are often unable to verify claims about health and nutrition products. They need to be able to rely on the information provided in order to make an informed decision.

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Jargon, exaggerations and puffery

Any claims made should be in plain language and should be clear and unambiguous.

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Know your rights as a consumer

The Fair Trading Act applies to anyone in trade, from big organisations to small businesses. The Consumer Guarantees Act applies when you have purchased a good or service normally bought for personal use.

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Layby sales

This fact sheet provides an overview of the law relating to layby sales under the Fair Trading Act. It is intended to help businesses and consumers who enter into layby sales agreements understand their rights and obligations.

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Misleading consumers about their rights

It is an offence under the Fair Trading Act to mislead a consumer about their contractual or legal rights.

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Place of origin representations

Many customers prefer to buy New Zealand-made products. Whether a product can be called New Zealand made is a question of fact and degree and depends on the extent to which the individual components of the product were actually made in New Zealand.

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Pricing

This fact sheet provides an overview of the types of pricing techniques a business might use when promoting goods or services. It is designed to give both businesses and consumers an understanding of how the Fair Trading Act applies to pricing.

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Pro-forma invoicing, inertia selling and other unfair sales techniques

Billing without the 'buyer' having agreed to purchase the good or service is known as pro-forma invoicing or false billing. Inertia selling is the practice of providing goods or services to people who have not requested them. Businesses must not request nor accept payment for goods or services if they don't intend to supply them. Any claims made that goods or services are needed must be based on fact.

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Pyramid selling and multi-level marketing claims

Pyramid selling schemes are prohibited by the Fair Trading Act because they are unfair and it is also common that many recruits are misled about the likely financial returns.

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Special offers and competitions

Businesses that, when promoting or selling goods or services, offer gifts or prizes they do not intend to provide, or do not intend to provide as offered, will breach the Fair Trading Act.

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Unsolicited goods and services

This fact sheet provides an overview of the new unsolicited goods and services provisions under the Fair Trading Act. It is intended to help consumers and businesses understand their rights and obligations when goods or services are supplied when they haven’t been asked for.

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Unsubstantiated representations

This factsheet provides an overview of the new substantiation provisions of the Fair Trading Act. It is designed to help businesses and consumers understand their obligations and rights when claims are made about goods and services.

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Use of agents and telemarketers

Your business is responsible for anything staff or agents say about the product or service. You need to make sure they are not making any misrepresentations.

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Health sector fact sheets

The health series of fact sheets is designed to help health professionals work within competition and consumer laws.

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