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Commission Reaches Settlement With Placemakers

Commission Reaches Settlement With Placemakers

The Commerce Commission has reached a settlement with Fletcher Distribution Limited, trading as Placemakers, regarding the incorrect in-store description, labelling and supply of a treated timber framing product, TimberSaver.

In November 2004 Placemakers retail stores began selling a new timber framing product, TimberSaver, also known in the building industry as T1.2. TimberSaver had been accredited as complying with the Building Code by the Building Industry Authority and as being suitable for use in situations which otherwise required the use of timber treated in accordance with the H1.2 hazard class requirements.

Between November 2004 and July 2005, as a result of a misunderstanding by Placemakers as to the true nature of TimberSaver treated timber, Placemakers represented on labels and invoices that the TimberSaver product was H1.2 treated timber.

The Commission launched an investigation following two complaints from consumers who had ordered H1.2 treated timber from Placemakers stores, but had been supplied with TimberSaver treated timber.

Commission Chair Paula Rebstock said, "Placemakers represented to customers that the product that they received was the product they had requested. This was not always the case. Correct information, which allows consumers to make an informed choice about the products they purchase, is important, especially when a new technical product is released into a market. Consumers may choose to try the new product, or may choose to stick with older time-tested technical products."

"One of the parties to raise concern was a consultant engineering company. The company had made a decision to take a strong line on the timber treatment used in their practice due to problems experienced by the building industry with timber durability. The company made a considered decision to use H1.2 treated timber on a project. However Placemakers supplied TimberSaver, although on the Placemakers' invoices the product was described as H1.2" said Ms Rebstock.

There are no indications to suggest that any loss or damage has been suffered by consumers who used TimberSaver treated timber believing it to be H1.2 treated timber. However, this case highlights the importance of companies having effective procedures in place to ensure the accurate labelling and description of the products they sell.

"It is up to the consumer to determine which product they choose to purchase and it is vital that consumers can rely on the accuracy of the information provided by the retailer. Nonetheless it is recognised that Placemakers' actions were as a result of a misunderstanding about the status of the new product and that when made aware of the issues it took immediate steps to resolve complaints and to assist the Commission's investigation," said Ms Rebstock.

Ms Rebstock said, "The Commission considered that a settlement was appropriate in this case, as Fletcher Distribution Limited have, amongst other things, agreed to put things right by undertaking to meet any valid guarantee claims that customers may have relating to TimberSaver in the event that customers experience problems in the future with TimberSaver."

The settlement also contains:
An admission by Fletcher Distribution Limited that it breached the Fair Trading Act 1986 by labelling TimberSaver as H1.2 treated timber.
An acknowledgement that Fletcher Distribution Limited acted promptly to resolve all customer complaints once the issue was drawn to its attention.
Corrective advertising to be undertaken by Fletcher Distribution Limited.
An external audit of Fletcher Distribution Limited's compliance programme.

Background

The difference between TimberSaver T1.2 and H1.2
H1.2 is a hazard class for timber that has been defined in New Zealand Standard 3640. The H1.2 treatment method set out in the standard provides for initial full sap wood penetration of the preservative compound into the timber before treatment can meet the requirements identified in clause 6.1.1.1 of the Standard.

In 2003-2004 TimberSaver was developed by Osmose New Zealand as a method of treating timber. TimberSaver is treated by coating the outer layers of the timber with a preservative compound. This method of treatment does not use the method of initial full sap wood penetration of the preservative compound specified in clause 6.1.1.1, New Zealand Standard 3640. With TimberSaver treatment, the borate preservative compound is at a higher concentration on the outer surface envelope (where decay might be expected to become established) but has been developed to diffuse throughout the timber cross-section should the timber become damp during construction or at any time through its service life.

In 2004 the Building Industry Authority accredited timber that had been treated with TimberSaver Boron, and issued a series of certificates of accreditation for the treated timber pursuant to section 59 of the Building Act 1991. Building consent authorities were required to accept these certificates as establishing compliance with the building code - pursuant to section 50 of the Building Act 1991 (and, later, the provisions of the Building Act 2004).

The accreditation of TimberSaver provided mandatory conditions of use. The mandatory conditions for the use of TimberSaver are similar to the advisory conditions for use of H1.2 treated timber, as defined by New Zealand Standard NZS3640. Both products meet the New Zealand building code.

TimberSaver treated timber was marked and coloured in a way which clearly distinguished it from other timber. It had the words "TimberSaver Boron" imprinted at 1500mm centres along one face of all the timber, and it was coloured bright orange. However not all industry participants were aware of the significance of the colouring or the imprint "TimberSaver Boron".

Between November 2004 and 22 July 2005, the Stock Keeping Unit or "SKU" code entered in Placemakers' computer system in relation to TimberSaver treated timber was H1.2. As a consequence store labels and invoices referred to TimberSaver treated timber as H1.2.

In 2005 concerns were expressed about various issues relating to TimberSaver treated timber, including the use of the term H1.2 to describe TimberSaver Boron treated timber, and the Department of Building and Housing (DBH) and the Commerce Commission initiated investigations into various issues.

The DBH report, Investigation into TimberSaver Treated Framing Timber - Final Report, is available for viewing online at http://www.dbh.govt.nz/technical-reports

ends

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