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New consumer protection laws are finally here

Media release: New consumer protection laws are finally here

Consumer NZ is welcoming new consumer protections that come into force on 17 June 2014.

"Long overdue changes to the Consumer Guarantees Act and Fair Trading Act will provide greater protection against unfair practices and dodgy dealers," says Consumer NZ chief executive Sue Chetwin.

Key changes include the amendment of the Consumer Guarantees Act to cover goods bought at auction.

"Up until now, goods bought through auction on sites like Trade Me have been excluded from the Act. That's been a windfall for the growing number of traders who use auction websites because they've been able to avoid any responsibility for faulty goods. This won't be able to happen anymore," Ms Chetwin says.

Just like products you buy in "bricks and mortar" stores, goods bought at auction will be covered by the Act, she says.

In addition, online traders will have to disclose whether they're "in trade" so consumers know who they're dealing with.

From 17 June, consumers will also have more protection against retailers who push extended warranties. Retailers will have to tell you what protection their extended warranties provide, over and above the guarantees already provided under the Consumer Guarantees Act.

"Extended warranties have been heavily promoted, often with confusing or misleading information about the benefits they offer. But in many cases, you're paying for protection you already have by law. Retailers now have to tell you about your existing legal rights," says Ms Chetwin.

Consumer NZ is also welcoming changes to door-to-door selling laws that will give consumers five working days to cancel a sale if they change their mind about the purchase. The rule also applies to telemarketing sales.

"We continue to get regular complaints about the high-pressure sales tactics used by door-to-door salespeople. Consumers finally have some extra protection against these traders," says Ms Chetwin.

Other changes to the Fair Trading Act will ban unsubstantiated product claims. This means businesses won't be able to make claims about a product or service if they don't have evidence or reasonable grounds for making the claims.

Businesses will also face substantially tougher penalties for serious breaches of the Fair Trading Act. Maximum penalties for misleading and deceptive conduct, false representations, and unfair practices have increased from $60,000 to $200,000 for individuals and from $200,000 to $600,000 for businesses. Individuals who repeatedly break the law will face banning orders for up to 10 years.

Businesses will also face penalties for failing to comply with the rules relating to door-to-door sales, extended warranties and lay-by sales.

More information on the key law changes is in the June issue of Consumer magazine and online

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