NZ Consumer Law: Fair Trading Act

• Consumer law in New Zealand aims to protect consumers and ensure fair trading practices.
• The key pieces of legislation are the Fair Trading Act (FTA) and the Consumer Guarantees Act (CGA).
• These laws provide consumers with rights and guarantees when purchasing goods and services.

Fair Trading Act (FTA)

• The Fair Trading Act 1986 promotes fair competition and prevents misleading conduct by traders.
• It applies to anyone in trade, which includes any activity relating to the supply of goods or services.
• The FTA prohibits false or misleading representations.
• This covers various aspects of goods or services, like pricing, quality, or origin.
• It also includes bait advertising, where a product is advertised at a low price to attract customers, but is not available.
• The FTA also covers unsubstantiated representations.
• Traders must have reasonable grounds for any claims they make about their products.
• The Commerce Commission enforces the FTA.
• The Commerce Commission can take action against businesses that breach the Act.
• Penalties for breaching the FTA include fines.
• Businesses can also be ordered to pay damages to consumers.
• The FTA also regulates product safety.
• It allows the government to set safety standards for goods.
• It allows for unsafe goods to be banned or recalled.
• The FTA includes provisions for disclosure of information.
• It ensures consumers have the information they need to make informed purchasing decisions.
• The FTA aims to create a level playing field for businesses.
• The FTA contributes to consumer confidence in the marketplace.

Consumer Guarantees Act (CGA)

• The Consumer Guarantees Act 1993 provides guarantees for goods and services purchased for personal, domestic, or household use.
• If goods or services fail to meet these guarantees, consumers have rights to remedies.
• The CGA applies to goods supplied by a supplier to a consumer.
• A consumer is defined as someone who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption.
• Goods must be of acceptable quality.
• Acceptable quality means goods are fit for purpose, acceptable in appearance and finish, free from defects, safe, and durable.
• Goods must be fit for a particular purpose that the consumer made known to the supplier.
• Goods must comply with their description.
• Goods must comply with samples.
• Goods must be reasonably priced if the price wasn't previously agreed on.
• Goods must be repaired or serviced within a reasonable time.
• The supplier guarantees they have the right to sell the goods.
• The consumer has the right to undisturbed possession of the goods.
• Services must be provided with reasonable care and skill.
• Services must be fit for purpose.
• Services must be completed within a reasonable time if no time was agreed.
• Services must be reasonably priced if no price was agreed.
• If goods do not meet the guarantees, the consumer can seek a remedy from the supplier.
• Remedies include repair, replacement, or refund.
• The type of remedy depends on whether the failure is minor or substantial.
• A minor failure can be repaired.
• A substantial failure cannot be repaired, or is too difficult to repair.
• If the failure is substantial, the consumer can reject the goods and get a refund, or get compensation for the reduced value of the goods.
• The consumer can recover damages for any loss or damage caused by the failure.
• The CGA applies in addition to any warranty.
• A warranty is a contractual promise given by the manufacturer or retailer.
• The CGA cannot be contracted out of for personal, domestic, or household use.
• Businesses can only contract out of the CGA if the goods or services are for business purposes.
• The CGA provides consumers with strong protection.
• The CGA ensures goods and services meet certain standards.

Overlap and Interaction

• The FTA and CGA work together to protect consumers.
• The FTA addresses misleading conduct and unfair practices before a sale.
• The CGA provides guarantees about the quality and performance of goods and services after a sale.
• A business might breach both acts simultaneously.
• For example, a business making false claims about a product's performance would breach the FTA.
• If the product then fails to meet the claimed performance, it would also breach the CGA.
• The FTA is enforced by the Commerce Commission.
• Consumers can also take private legal action under the FTA.
• The CGA is enforced by consumers themselves.
• Consumers can take action against suppliers who fail to meet their obligations.

Key Differences

• The FTA focuses on conduct before, during, and after the sale.
• The CGA focuses on the quality and performance of the goods or services themselves.
• The FTA applies to all 'persons in trade'.
• The CGA applies to goods and services acquired for personal, domestic, or household use.
• The remedies available under each act are different.
• The FTA allows for fines and damages.
• The CGA allows for repair, replacement, or refund.

Practical Implications

• Businesses need to ensure their advertising and marketing materials are accurate and not misleading.
• Businesses need to ensure goods and services are of acceptable quality and meet all guarantees.
• Businesses need to have processes in place to handle consumer complaints and provide remedies.
• Consumers need to be aware of their rights under the FTA and CGA.
• Consumers should keep records of purchases, such as receipts and warranties.
• Consumers should raise any issues with the supplier as soon as possible.
• Consumers should seek legal advice if they are unsure of their rights.

Recent Amendments and Developments

• Consumer law is regularly reviewed and updated.
• Amendments are made to address emerging issues and reflect changing consumer needs.
• It is important to stay up-to-date with the latest changes to the FTA and CGA.
• Recent developments include increased focus on online trading and digital products.
• There is increased scrutiny of businesses that engage in unfair or misleading practices.

Conclusion

• The Fair Trading Act and Consumer Guarantees Act are vital for consumer protection in New Zealand.
• They ensure fair trading practices and provide consumers with rights and remedies.
• Businesses must comply with these laws to avoid penalties and maintain consumer trust.
• Consumers must be aware of their rights to make informed purchasing decisions and seek redress when necessary.

Overview of Consumer Law in New Zealand, focusing on the Fair Trading Act (FTA) 1986. Covers misleading representations, bait advertising and unsubstantiated claims. Explains the role of the Commerce Commission in enforcing the FTA.