The Government is aiming to stamp out 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 the Bill does three things:
- streamlines the process for the update of product safety standards;
- increases penalties for breaches of the Fair Trading Act;
- introduces a new ‘safe harbour’ legal defence to support the takedown of scam websites.
“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,” said Minister Willis.
“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.
“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,” Minister Brewer said.
“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 Ministers say the Bill also addresses long‑standing issues with product safety regulation, allowing New Zealand 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.
“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,” Ms Willis said.
