Fair trading laws change

Amendments to the Fair Trading Act (FTA) are now in place to strengthen protections for businesses and consumers, and tackle unfair business practices.

Anna Rawlings, chair of the Commerce Commission, says the changes include the addition of a new prohibition against “unconscionable conduct”.

This is business activity that substantially departs from New Zealand’s generally accepted or expected standards of business conduct – for example, commercial conduct that goes against good conscience.

“Good business conscience is measured against the values and norms of modern society and expectations of what is right and proper according to those values and norms,” says Rawlings, pictured.

“Those values and norms can include acting honestly, fairly and without deception or unfair pressure. This is conduct that’s more than just hard commercial bargaining, but is clearly unfair and unreasonable.”

From August 16, businesses have become protected from unfair terms in standard form small-trade contracts – these are “take it or leave it” contracts, such as many power or phone service agreements. Many standard commercial supply agreements may also be standard form small-trade contacts.

“Terms in standard form small-trade contracts can be assessed as unfair under the new law if, at the time the contract is entered into, it forms part of a trading relationship with an actual or expected annual value of less than $250,000.”

Amendments to the FTA also offer additional protections for people approached by door-to-door sellers.

“Residents can stop salespeople from coming to their home to sell goods or services without being invited,” explains Rawlings. “They can stop the salesperson from visiting without being invited by either telling them not to enter the property, or by asking them to leave when they are already there.

“Residents can use a sticker or sign, such as a ‘do not knock’ sticker on their gate or front door which tells salespeople they cannot enter their property. If residents have a face-to-face conversation with a particular salesperson and they tell them to not enter the property or leave, then the salesperson cannot return for two years.”

These new protections for residents strengthen existing protections under the Trespass Act 1980.

The commission has released guidance on its website for businesses and consumers wanting to know more about the new laws. Click here to access it online.

The regulator encourages businesses to review and adjust their practices to ensure they are compliant with the new laws, and to steer clear of conduct that may breach these provisions and cause harm to other businesses or consumers.

Rawlings says: “We also encourage consumers and businesses to contact us if they feel that standard form contracts being provided to them contain unfair clauses, or if they feel they are subject to business practices that may be considered unconscionable. 

“This helps us to identify conduct to be prioritised for investigation and helps inform our education and compliance work.” Visit https://comcom.govt.nz/make-a-complaint to report FTA issues to the regulator.