Your rights with digital products, eg e-books, movies, songs, and smart products (Internet of things).

Before you buy digital products

Some digital products are free, eg smartphone apps. Others you pay a subscription or one-off fee, eg streaming a new-release movie. Others may have ongoing consumable costs which are charged when used, eg in-app or in-game purchases. 

Some come with restrictions, for example: 

  • licensed, eg software for use by one named person or on a limited number of devices 
  • digital rights management, meaning there are limits on copying and sharing, eg music files. 

Almost all digital products involve sharing your personal information with the business supplying the digital files. Even for free products, you generally must have an account with information about your name, email and payment details.

Before you buy, download or stream, check: 

  • terms and conditions — which may include how credit cards are links to initial and ongoing purchases 
  • how much personal information you are expected to share — and how the business will keep it safe 
  • if it's a genuine product — watch out for scams and illegal copies.

Make sure you know who has access to your accounts and how charges work. Remember to protect your passwords.

Example — Online gaming costs

Tane downloads an online game which he thinks is a one-off cost. As the game develops he buys a new feature in the game. He’s not asked for any credit card information as it’s already linked when he set up the account. His bank statement for his credit card then shows his new purchases.

Before you buy smart products

Smart products connect to the internet, sometimes called the Internet of Things (IoT). Examples include fitness monitors, lights that switch on and off via your smartphone, or fridges that send alerts if you run low on milk.

Your consumer rights are the same as for any faulty product — a refund, repair or replacement. Contact the retailer. It’s their responsibility to solve any issues with the manufacturer or software company.

But you also need to think about privacy and online security breaches.

Smart products collect a certain amount of data during set-up and use. Check the terms and conditions. Make sure you know what information will be collected, and how the company will use and store it. If you are not happy with how your information will be collected or stored, it’s best not to buy the smart product.

Before you buy

Example — Smart TV and privacy

Jeremy buys a smart TV. When setting it up, he's asked to sign in with a Google account. He's unhappy — he doesn't want to share his TV viewing habits with the tech company. He calls the provider to complain. They point out a notice on the TV packaging, which explains the sign-in requirement. If Jeremy thinks his personal details will be inappropriately collected, used or shared, he can complain to the Privacy Commissioner.

Your rights

Digital products are covered by the Consumer Guarantees Act (CGA). Like all products, digital products must meet guarantees set out in the CGA:

  • fit for their normal purpose
  • no faults or defects
  • safe
  • last for a reasonable time
  • acceptable in look and finish.

If you have a problem with a digital product, you can ask the provider to get it fixed. If the problem can’t be repaired, you can ask for a replacement or a full refund.

If it is a serious fault, eg a mobile phone app that claimed to be compatible with your phone but isn't, or the digital provider can't fix it, you can choose to keep the product and ask for compensation for any drop in value of the product below what you paid for it.

Faulty products

The Fair Trading Act is likely to apply, and the Consumer Guarantees Act might apply when you buy from an overseas trader.

However, it’s harder to resolve problems and claim your consumer rights.

Check the trader's website for terms and conditions including return, exchange or refund policies, complaints process, and any consumer laws that apply.

It pays to use trusted international retailers and websites. These usually have good customer service if there is an issue.

Online shopping

Before you buy a digital product or smart product, check the terms and conditions to find out:

  • what personal information will be collected
  • how it will be stored, and for how long
  • who will have access to it, including if it will be shared with other businesses
  • how you can ask to check your personal data and get it updated or deleted
  • what happens to your personal information if you stop using the product.

If you are not happy with how your data will be collected, used or stored, do not buy the product.

You have rights under the Fair Trading Act (FTA) when you buy digital products sold in New Zealand, including those sold by businesses based overseas.

Under the FTA, you have protection from:

  • false or misleading descriptions or statements
  • claims the retailer or manufacturer can't prove
  • unfair sales practices
  • unfair contract terms, eg termination fee to cancel a contract after it automatically renews.

Misleading prices or advertising

Contracts and sales agreements

The Copyright Act covers digital products. It protects original works from being used, copied or shared without the permission of the copyright owner.

There are exceptions where copying is allowed, including:

  • time shifting — recording a TV show to watch another time, or to make a complaint to the broadcaster
  • format shifting — copying a sound file onto another one of your devices.


Example — Faulty download

Sandy downloads a movie from a local online retailer onto her computer to watch later. When she tries to watch the movie, it keeps having glitches. As it's faulty, Sandy can ask the digital provider for a refund or a free replacement under the Consumer Guarantees Act.

If a digital product doesn't work, check first if it's a problem with your device or internet connection.

If things go wrong

Contact the seller first

First try to solve the problem directly with the digital provider if:

  • the digital product doesn't work properly
  • you have been misled about what you bought
  • the retailer did not have the right to sell the products.

Check their website for how to make a complaint. There might be a complaints email address, or an online complaints form.

You can also post fair and accurate feedback on their website or social media page. Give details about the issue and how your complaint was handled.

Making a complaint

Next steps

If you can’t resolve your issue directly with the seller, the Disputes Tribunal or District Court may be your next step.

Get support at any point from:

  • Citizens Advice Bureau (CAB) – this is a free, independent service, run by volunteers. CAB can advise you on your consumer rights and obligations, in person, by phone, or online.
  • Community Law Centre – this service offers free one-on-one legal advice to people with limited finances. The organisation has 24 community law centres throughout the country. You can find legal information and other resources on its website.

A CAB near you — Citizens Advice Bureau(external link)

Our law centres — Community Law Centres(external link)