Consumer defends costly code

JOHN ANTHONY
Last updated 05:00 16/07/2014

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Customers will be the winners if companies agree to sign up to Consumer NZ's tough fair trading code of conduct.

To earn its "Consumer Trusted" accreditation a business must sign up to a strict code of conduct and a set of eight principles promoting fair trading. They will also pay a fee of up to $25,000 a year.

Consumer NZ chief executive Sue Chetwin said the programme aimed to deliver high standards of customer service and consumer confidence.

The organisation deals with about 4000 complaints and inquiries a year, which Chetwin said was "just the tip of consumer dissatisfaction" with traders.

"What we've developed through Consumer Trusted is a visible way of rewarding businesses with genuinely top-class customer service."

"Our goal is to inspire all businesses to go beyond the minimum standards of consumer law," Chetwin said.

The programme's consumer principles include: excellent customer service, fair returns and refunds policies, clear pricing and accurate advertising.

Businesses must also sign up to a code of conduct which includes a range of fair trading clauses.

For example, if a product worth more than $100 goes on sale within a week of purchase the buyer is entitled to a refund of the difference.

Accredited businesses must also belong to an approved dispute-resolution scheme, or allow Consumer NZ to provide the service.

Large companies would pay $25,000 a year to be part of the programme, while the fee for smaller businesses would be in the "low thousands" of dollars per year, she said. Revenue from the programme would go back into research, testing and consumer dispute resolution service.

Chetwin said she hopes to get 25 businesses on board by the end of the year. Four have already been accredited, including telecommunications company 2degrees, online electricity retailer Powershop, internet service provider Inspire Net and shoe retailer Shoe Clinic.

Canterbury Employers Chamber of Commerce chief executive Peter Townsend said he had not looked at the scheme in detail but it sounded complicated.

"My first reaction to that is that good businesses self-identify and that businesses that operate with high integrity are well recognised by consumers. That flows through to brand recognition and everything else.

"I'm not sure how much is going to be achieved by a complex, expensive accreditation system."

Townsend doubted the scheme would deliver what consumers wanted which was clarity between company and customer and a customer ethos which made good business sense.

"I would have thought a good business would do all of that and would be recognised for doing all of that without going through a complex accreditation system" Townsend said.

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"I don't know many businesses that would pay $25,000 to get a tick in those boxes when the businesses that are already doing that are generating good custom because they are doing it." He expected accredited companies to have ongoing compliance costs.

Chetwin said companies that breached the code of conduct would be given an opportunity to remedy the situation, but a serious lapse could result in them being thrown out of the programme.

"We would have to look at it on a case-by-case basis. We will be feeling our way a bit."

The Commerce Commission, which is charged with policing the Fair Trading Act, said it was not aware of the new service until today and was not in a position to comment.

THE 8 PRINCIPLES

Provide excellent customer service

Fair, clear returns and refunds policies

Informative and up-to-date website

All complaints and disputes dealt with fairly

Contracts must be fair and easily understood

Clear pricing

Customer details are not exploited

Advertising is accurate


- The Press

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