Hon Nicola Willis
Minister for Economic Growth
Hon Cameron Brewer
Minister of Commerce and Consumer Affairs

The Government is tackling deceptive business practices with the introduction of the Fair Trading Amendment Bill, Economic Growth Minister Nicola Willis and Commerce and Consumer Affairs Minister Cameron Brewer say.

“It’s very simple, the price that Kiwis see on the shelf or in the supermarket aisle should be the price they pay at the checkout,” Nicola Willis says.

“We know that New Zealanders are watching every dollar, but too many shoppers are being misled. Whether they’re being charged more than the advertised price or being sold a ‘special’ that isn’t really a saving - that’s not acceptable.

“That’s why we’re lifting penalties for misleading pricing and conduct - so big businesses can’t treat breaking the law as a cost of doing business, instead facing consequences that match the harm caused and the profit gained.

“The maximum penalty for breaches of the Fair Trading Act is currently $600,000. Following these changes, companies could be liable for up to three times the value of the commercial gain, the value of the transactions, or $5 million.

“Most businesses follow the rules. Some don’t, which is where we’re seeing misleading pricing and promotions that short-change shoppers.”

This work follows Consumer NZ’s “Price it Right” petition, which showed how widespread pricing inaccuracies are. The Commerce Commission also estimated pricing errors could be costing New Zealanders tens of millions of dollars a year.

The Bill does three things:

• increases penalties for breaches of the Fair Trading Act.
• introduces a new ‘safe harbour’ legal defence to support the takedown of scam websites.
• streamlines the process for the update of product safety standards.

“Kiwis should have confidence they are being treated fairly by the businesses they buy from. These changes provide strong incentives for businesses to follow the law and increases the consequences for those that don’t,” Mr Brewer says.

“The Bill establishes a new legal defence called a ‘safe harbour’ allowing online service providers to take down suspected scam content quickly, provided they take reasonable precautions.

“Scams are becoming increasingly sophisticated, and this safe harbour defence, developed with industry support, gives providers the confidence to stop them.

“The Bill also addresses longstanding issues with product safety regulation, allowing us to keep pace with international standards and reducing unnecessary costs for businesses while maintaining safety.

“The Bill will shortly be referred to Select Committee for six months, and we encourage businesses and consumers to have their say.

“Our message to dodgy traders is simple: follow the law or pay the price.”

“These changes back honest businesses by making sure competition is based on playing by the rules, not cutting corners. When people can trust what they’re buying, and those who cheat face real consequences, it lifts confidence and supports a stronger, more competitive economy,” Nicola Willis says.

Notes:

• The new safe harbour legal defence supports the work of the Anti-Scam Alliance, a cross-sector group that brings together telecommunications, digital platforms, banking, government and consumer groups in the fight against scams.
• Penalties for breaching most provisions, including misleading and deceptive conduct, will increase from a maximum of $200,000 for individuals and $600,000 for body corporates to the greater of:
  • $1 million for individuals or $5 million for body corporates; or
  • Three times the value of the commercial gain made or loss avoided; or
  • The value of the consideration for the transaction(s) that constituted the contravention.
• Maximum penalties for breaching management bans will increase from $60,000 to $200,000.
• Maximum penalties for other conduct like breaching consumer information requirements, consumer transaction rules, and impeding enforcement will increase from $10,000 to $60,000 for individuals and from $30,000 to $200,000 for body corporates.
• Most breaches will move from a criminal liability regime to a civil liability regime. Conduct that is serious or deliberate will remain criminal offences - such as demanding payment without intending to supply, serious product safety breaches, or obstructing the Commerce Commission.

© Scoop Media