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Commerce Commission Fine Print Seminar

Fine print: We will give you a loan for a fee of up to only $500*

Media Release 1999/90

This example of fine print in advertising is real. It is from one of the Commerce Commission cases being discussed tomorrow at a seminar about advertising regulation, being run by the Commission and the advertising industry.

Commission Fair Trading Manager Rachel Leamy said that the Commission is delighted with the response from the industry.

"More than 50 people from advertising agencies and from media that carry advertising have registered," Ms Leamy said.

"They are precisely the people we want. Those who are writing ads and those making decisions about publishing or broadcasting them."

The Advertising Agencies' Association, Association of New Zealand Advertisers, media bodies, Advertising Standards Authority and Ministry of Consumer Affairs have all worked with the Commission to organise and promote the seminar.

"Support from these organisations has been crucial to its success," Ms Leamy said.

* Except in some circumstances when the fee will be $1,000.

The Commission has found that most advertisers rely on their advertising agency and the media used to carry the advertising to ensure that the advertisements comply with the Fair Trading Act.

Typically they are shocked if the Commission takes action against their advertising because they had been assured that they were complying with the Act. And the shock gets worse when they realise the full cost of the mistake.

One advertiser lost $1 million in sales when it was prosecuted by the Commission. Another found a large colour photograph and critical article about its promotion on the front page of one of the major daily newspapers. A third case was highlighted on a newspaper's billboards.

"For the advertiser, the total cost can be very high," Ms Leamy said. "There are the costs of scrapping the campaign, bad publicity, management time, legal expenses and, potentially, fines.

"And what agency wants a reputation for having cost its client that much time and money?

"The main problem seems to be lack of knowledge," Ms Leamy said.

"That is disturbing because the Act has been law for more than 10 years, and some people have clearly not done their homework. This seminar is one of the things we are doing to help fix that.

"Our objective is compliance with the law, and that is best achieved through a mixture of education and enforcement. Where education isn't enough, we will take enforcement action."

Seminar venue: Centra Hotel, Christchurch (3pm to 6pm)


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