Your rights if a business acts in an unfair or misleading way, including sales tactics and selling unsafe products.

Intent of the Act

The Fair Trading Act (FTA) exists to:

  • promote fair competition
  • make sure consumers get accurate information before buying products and services
  • promote product safety.

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.

Fair Trading Act(external link) — Legislation.govt.nz

If you bought something online from an overseas seller, the Fair Trading Act still applies, but it could be difficult to enforce.

Online shopping


Your rights

The Fair Trading Act makes these types of trader behaviour illegal:

Ways to buy and pay

The Fair Trading Act also outlines the rules and your rights for:

Laybys and buy now, pay later

Telemarketing and door-to-door sales

Warranties

Auctions

Rules on safety and information

The FTA also has rules about product safety, and what suppliers and manufacturers must tell consumers about certain products, eg cars, children's toys and clothing.

Product safety standards and unsafe goods notices

Product safety standards, product bans and unsafe goods notices are issued by the government:

  • Product safety standards aim to prevent or reduce the risk of injury.
  • Unsafe goods notices (product bans) stop the sale of unsafe goods, which will or may cause injury. Bans are for 18 months, unless they're withdrawn earlier. After 18 months, the ban can be renewed or imposed indefinitely.

Consumer information standards

These are rules on information that must be given for certain consumer products and services, including:

  • care labels
  • country of origin labels on clothing and shoes
  • fibre content labels
  • used motor vehicles
  • water efficiency labelling scheme.
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When the Act applies

The FTA applies to anyone in trade, including:

  • all commercial activities, trades, professions and businesses
  • overseas businesses that supply goods, services or grant interests in land within New Zealand
  • online sales.

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 or not 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.


When the Act doesn't apply

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.

Contracting out of the Fair Trading Act(external link) — Commerce Commission


If things go wrong

Report a trader to the Commerce Commission

The Commerce Commission is responsible for enforcing the FTA. Reports from the public help it identify traders suspected of regularly breaking the rules.

Making a complaint(external link) — Commerce Commission

The Commission can investigate traders and take steps to ensure they stick to the rules by either:

  • giving advice on how to comply with the law
  • issuing warnings
  • taking them to court.

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.

Take legal action

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 a number of orders, including:

  • the trader pays damages to you if you have suffered some loss or damage
  • a contract be altered or made void
  • money be refunded
  • products be repaired or services supplied.

Enforcement of the Fair Trading Act(external link) — Commerce Commission