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Commerce Commission warns about fakes

2 March 2009

The Commerce Commission is cautioning consumers to be alert after issuing more than 70 warnings relating to the sale of possible counterfeit clothing and footwear on the Trade Me website. The traders have been warned that they risk committing an offence under the Fair Trading Act if they are selling or offering for sale goods that are not genuinely manufactured 'labelled' items.

"Selling counterfeit goods harms both the consumer and legitimate businesses," said Adrian Sparrow, Commerce Commission Director of Fair Trading. "Consumers have a role to play and should exercise caution if offered a well known brand at a low price. If you are paying $50 for a brand name item that usually retails new for $200, instead of getting a prestigious label at a bargain price, it is more likely that you are paying over the odds for a cheap knock-off. The best way to ensure that you are getting the genuine article is to buy from an authorised dealer."

"It is appropriate that companies can and do enforce their own intellectual property rights, but the Commission is concerned by this seemingly increasing trend," said Mr Sparrow.

The Commerce Commission sent the warnings in response to a complaint laid by Trade Me after Trade Me's security tools had identified a number of potentially counterfeit items on offer via the website. The identified traders have been banned by Trade Me. Consumers concerned that they may have purchased counterfeit goods via Trade Me should contact Trade Me in the first instance.

"The Commission will continue to work with Trade Me and monitor this situation. The Commission will take appropriate action if it is believed that any offences are or have been committed under the Fair Trading Act. If any information is obtained which indicates that there may be other offences that do not come under the Commission's jurisdiction, these matters will be referred to the appropriate agency," said Mr Sparrow.

"It is appropriate that this warning comes at the start of Fraud Awareness Week., This is an initiative to raise New Zealander's awareness of the dangers of fraud and scams and to inform consumers about how they can protect themselves. Consumers should remember the golden rule - if it seems too good to be true, it probably is," said Mr Sparrow.

More information about Fraud Awareness Week can be found at www.scamwatch.govt.nz

Background

The Fair Trading Act

Section 13. False (or misleading) representations -

No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services,

(a)(make a false or misleading representation) that goods are of a particular kind, standard, quality, grade, quantity, composition, style, or model, or have had a particular history or particular previous use;

Section 26. Importation of goods bearing false trade description -

(1) This section applies to any goods to which a false trade description is applied.

(2) All goods to which this section applies are hereby prohibited to be imported into New Zealand, and shall be deemed to be included among goods prohibited to be imported under (section 54 of the Customs and Excise Act 1996) and the provisions of that Act shall apply to such goods accordingly.

(3) In this section, "false trade description"' means any representation which if made in connection with the supply or possible supply of goods or with the promotion by any means of the supply or use of goods would constitute a contravention of section 13(a), (d), or (j) of this Act.

(4) For the purposes of subsection (1) of this section, a false trade description shall be deemed to be applied to goods if -

(a) It is woven in, impressed on, worked into, or annexed or affixed to the goods; or

(b) It is applied to a covering, label, reel, or thing in or with which the goods are supplied.

(5) For the purposes of this section, a trade mark is not a representation.

Only the courts can decide if the Act has been breached. Breaches of the Act may result in prosecution in court. Companies found guilty of breaching provisions of the Act may be fined up to $200,000 and individuals up to $60,000.

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