Your rights if a business acts in an unfair or misleading way, including sales tactics and selling unsafe products.
The Fair Trading Act is a law that protects consumers in New Zealand from unfair business practices, with everything from advertising to sales techniques. It prohibits misleading information, unfair practices, and unsafe products.
The Act works to stop businesses from being misleading about their products or services, they cannot make false claims or withholding important information. It also deals with unfair contract terms and pushing uninvited sales of goods and services.
The Fair Trading Act (FTA) exists to:
The FTA makes it illegal for businesses to mislead or deceive you and requires them to make sure the information they provide is accurate, and that they don't withhold important information.
The Act also gives you special rights if you buy products or services on layby or by uninvited direct sales, or you buy extended warranties that fall within the FTA's definitions.
If you bought something online from an overseas seller, the Fair Trading Act still applies, but it could be difficult to enforce.
The Fair Trading Act makes these types of trader behaviour illegal:
Businesses must not mislead or deceive you about the things they sell. This covers anything written or said about products or services, including:
It doesn't matter if a trader didn't intend to mislead, and they can't rely on fine print in advertising or contracts to correct a misleading overall impression or hide important conditions.
This includes statements or conduct that's liable to mislead or deceive about:
Quotes and estimates may be considered misleading conduct if the final cost is bigger than you expected.
If a business displays an item with an incorrect price, the trader doesn't usually have to sell it at that price. If the incorrect pricing was a genuine mistake, they have the right to ask you to pay the correct amount. Read about what happens if you're undercharged:
Traders can’t make unsubstantiated claims about products or services.
This means a trader needs to have reasonable grounds to make a claim about a product or service at the time they make the claim. They're breaching the Act if they make a claim they can't back up with evidence, even if it later turns out to be true.
This rule doesn't apply if a reasonable person would know the claim was just exaggeration (also known as puffery).
Unfair practices banned by the FTA include:
A standard form consumer contract is a contract you accept on a take it or leave it basis — you can't negotiate the terms. If you think a term is unfair, you can apply to the Commerce Commission under the FTA to have it reviewed.
The Commerce Commission then decides if they will ask the District Court to declare the term unfair. The Court must be satisfied that the term in a contract:
The contract as a whole is considered, as it might offer benefits that outweigh any unfairness.
Some terms are exempt, and can’t be declared unfair if they:
Once a contract is agreed to or signed, cancelling it can be difficult. Early cancellation fees are common. This is considered fair if it is a reasonable estimate of the loss the business will suffer from the cancellation.
For more information on contracts, your rights, cancellations and common tricky words and phrases, see:
The Fair Trading Act also outlines the rules and your rights for:
The FTA also has rules about product safety, and what suppliers and manufacturers must tell consumers about certain products, e.g., cars, children's toys and clothing.
Product safety standards, product bans and unsafe goods notices are issued by the government:
These are rules on information that must be given for certain consumer products and services, including:
Use our consumer rights finders for products, services, after buying a car, and flights. Check your rights
The FTA applies to anyone in trade, including:
The FTA applies to all aspects of the promotion and sale of goods and services — from advertising and pricing to sales techniques and financing.
It also applies to certain activities whether the parties are 'in trade' — such as employment advertising, pyramid selling, and the supply of products covered by product safety and consumer information standards.
All online sellers who operate as traders must make it clear to potential buyers that they are traders, including when selling through an intermediary website like Trade Me.
The Fair Trading Act almost always applies.
Traders can’t get you to agree that the rules against misleading or unfair trading won’t apply to you, even if you sign a contract with a clause to that effect. It is illegal and the clause is not enforceable.
Businesses cannot contract out of their obligations under the Act, except for a limited exception for business-to-business transactions that meet certain requirements.
The Commerce Commission is responsible for enforcing the FTA. Reports from the public help it identify traders suspected of regularly breaking the rules.
The Commission can investigate traders and take steps to ensure they stick to the rules by either:
The Commission can't act on your behalf about your specific issue. If you can't resolve the issue with your lender, complain to the lender's dispute resolution scheme.
You can also take legal action of your own against a trader under the FTA.
If you bring a claim in the Disputes Tribunal or the District Court they may grant several orders, including:
For general enquiries please contact us
