New era for consumers

Last updated 14:37 17/06/2014

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Businesses have been warned to take heed of new consumer laws coming into force today with beefed-up penalties for those that fail to toe the line.

The overhaul of 10 different pieces of legislation has been underway for years, before being passed by Parliament in December.

Most of the changes, which are explained in detail here, come into force today.

Consumer NZ has spent years campaigning for the changes, and has welcomed what it described as a long overdue "leap into the 21st century".

Among the host of improved protections are the extension of the Consumer Guarantees Act to auctions and all online trading.

Sellers have to specify if they are "in trade", and will no longer be able to get away with supplying dodgy goods.
Businesses will also have to ensure that goods are delivered on time and in good condition.

Door-to-door and phone salespeople face new checks and balances, while shops offering extended warranties have to spell out exactly what advantages they give over existing legal protections.

New restrictions on "unsubstantiated claims" means companies will have to cut out marketing hype and only say things they prove.

The shift in the burden of proof will make it easier for the Commerce Commission to prosecute false and misleading claims.

The maximum penalties for breaches of the Fair Trading Act have tripled to $200,000 for an individual and up to $600,000 for a company.

Law firm Duncan Cotterill has warned that virtually all businesses that deal with consumers will be affected.

Commercial law partner Richard Smith said businesses should be reviewing and updating their approach to marketing, and ensuring there were steps to checking claims.

"Seek to rely on facts, figures and credible sources of information to back up representations, not guesses and opinion," he said.

One of the biggest changes still to come will ban "unfair" terms and conditions from consumer contracts.

However, that has been delayed until March 2015 to give companies time to prepare.

"In the lead-up, businesses should review all their standard form consumer contracts to identify any provisions that could potentially be considered unfair," Smith said.

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