Fair Trading Act 1986

Last updated

Fair Trading Act 1986
Coat of arms of New Zealand.svg
New Zealand Parliament
  • An Act to prohibit certain conduct and practices in trade, to provide for the disclosure of consumer information relating to the supply of goods and services for nz and to promote product safety and also to repeal the Consumer Information Act 1969 and certain other enactments.
Royal assent 17 December 1986
Status: Current legislation

The Fair Trading Act 1986 is a statute of New Zealand, developed as complementary legislation to the Commerce Act 1986. [1] Its purpose is to encourage competition and to protect consumers/customers from misleading and deceptive conduct and unfair trade practices. [2]

Contents

The Fair Trading Act provides for consumer information standards. Under the Act, the Commerce Commission enforces product safety standards on items such as bicycles and flammability of children's night clothing.

Main rules

The Act protects customers from unfair conduct. Unfair conduct has been classified in the act as the following:

  1. Misleading and deceptive conduct: Generally, in relation to goods, in relation to services and in relation to employment [3]
  2. Unsubstantial representation [4]
  3. False representations [5]
  4. Unfair practices: These include but are not limited to Bait advertising, referral selling and trading stamp schemes. Regulation relation to Trading stamp schemes however has been repealed. [6] [7]

Part 2 of the Act also looks at Consumer information. It defines standards and also compliance requirements.

A 2015 amendment increased protection against "unfair contracts". [8]

- Difference between the Fair Trading Act and the Consumer Guarantees Act (CGA): the FTA covers claims on products and services before they are bought while the CGA covers claims after the product or service has been bought. [9]

Important facts

The Fair Trading Act 1986 is a significant piece of legislation in New Zealand that is designed to promote fair competition and protect consumers from unfair business practices. Here are some key facts about the Fair Trading Act 1986:

Purpose

The primary purpose of the Fair Trading Act 1986 is to promote fair competition and to protect consumers and businesses from misleading or deceptive conduct in trade.

Enforcement

The Act is enforced by the Commerce Commission, an independent Crown entity responsible for enforcing competition, fair trading, and consumer credit contracts laws in New Zealand.

Prohibits Misleading Conduct

The Act makes it unlawful for businesses to engage in misleading or deceptive conduct in trade. This includes false advertising, false claims about products or services, and any form of misleading communication.

Unfair Practices

In addition to prohibiting misleading conduct, the Act also addresses other unfair practices, such as bait advertising (where a business advertises a product at a certain price but then refuses to sell it) and pyramid selling schemes.

Consumer Guarantees

The Act sets out consumer guarantees that products and services must meet. These include guarantees that goods are of acceptable quality, match their description, and are fit for purpose.

Product Safety

The Fair Trading Act also covers product safety. It is illegal to sell goods that are unsafe, and businesses are required to notify the Commerce Commission if they become aware of a product that could be a danger to consumers.

Penalties for Non-Compliance

Businesses found to be in breach of the Act can face significant penalties, including fines and other enforcement measures. The penalties are designed to deter businesses from engaging in unfair or deceptive practices.

Private Right of Action

The Act also allows consumers and businesses to take legal action against traders who engage in misleading or deceptive conduct. This means that individuals or entities affected by a breach of the Act can seek remedies through the courts.

Consumer Information

The Act requires businesses to provide clear and accurate information to consumers about products and services, including pricing, terms and conditions, and any additional costs.

International Trade

The Fair Trading Act 1986 applies not only to domestic trade but also to international trade conducted by New Zealand businesses. This ensures that businesses are held to the same standards when dealing with both local and international consumers.

Amendments

The Act has undergone several amendments since its inception in 1986 to address emerging issues in the marketplace and to align with international best practices in consumer protection. The Fair Trading Act 1986 plays a crucial role in regulating the marketplace in New Zealand, aiming to ensure that businesses operate with honesty, transparency, and integrity, and that consumers are protected from unscrupulous practices. It has been instrumental in creating a fair and competitive trading environment in the country.

See also

Related Research Articles

The Federal Trade Commission Act of 1914 is a United States federal law which established the Federal Trade Commission. The Act was signed into law by US President Woodrow Wilson in 1914 and outlaws unfair methods of competition and unfair acts or practices that affect commerce.

<span class="mw-page-title-main">Federal Trade Commission</span> United States government agency

The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction over federal civil antitrust law enforcement with the Department of Justice Antitrust Division. The agency is headquartered in the Federal Trade Commission Building in Washington, DC.

The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974, which was renamed the Competition and Consumer Act 2010 on 1 January 2011. The ACCC's mandate is to protect consumer rights and business rights and obligations, to perform industry regulation and price monitoring, and to prevent illegal anti-competitive behaviour.

Many business or trade practices involved in dealings between companies and other businesses or consumers may be considered fair and legal. Unfair business practices encompass fraud, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers, and are prohibited by law in many countries. In the European Union, each member state must regulate unfair business practices in accordance with the Unfair Commercial Practices Directive, subject to transitional periods.

<span class="mw-page-title-main">False advertising</span> Misleading content in advertisements

False advertising is defined as the act of publishing, transmitting, or otherwise publicly circulating an advertisement containing a false claim, or statement, made intentionally to promote the sale of property, goods, or services. A false advertisement can be classified as deceptive if the advertiser deliberately misleads the consumer, rather than making an unintentional mistake. A number of governments use regulations to limit false advertising.

<i>Competition and Consumer Act 2010</i> Act of the Parliament of Australia

The Competition and Consumer Act 2010 (CCA) is an Act of the Parliament of Australia. Prior to 1 January 2011, it was known as the Trade Practices Act 1974 (TPA). The Act is the legislative vehicle for competition law in Australia, and seeks to promote competition, fair trading as well as providing protection for consumers. It is administered by the Australian Competition & Consumer Commission (ACCC) and also gives some rights for private action. Schedule 2 of the CCA sets out the Australian Consumer Law (ACL). The Federal Court of Australia has the jurisdiction to determine private and public complaints made in regard to contraventions of the Act.

Misleading or deceptive conduct is a doctrine of Australian law.

<span class="mw-page-title-main">Unfair Commercial Practices Directive 2005</span>

The Unfair Commercial Practices Directive 2005/29/EC regulates unfair business practices in EU law, as part of European consumer law. It requires corresponding laws to be passed that incorporate it into each member state's legal system. It is intended to provide a level playing field in the single market, reducing trade barriers.

The Commerce Commission is a New Zealand government agency with responsibility for enforcing legislation that relates to competition in the country's markets, fair trading and consumer credit contracts, and regulatory responsibility for areas such as electricity and gas, telecommunications, dairy products and airports. It is an independent Crown entity established under the Commerce Act 1986. Although responsible to the Minister of Commerce and Consumer Affairs and the Minister of Broadcasting, Communications and Digital Media, the Commission is run independently from the government, and is intended to be an impartial promotor and enforcer of the law.

Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesses from engaging in fraud or specified unfair practices to gain an advantage over competitors or to mislead consumers. They may also provide additional protection for the general public which may be impacted by a product even when they are not the direct purchaser or consumer of that product. For example, government regulations may require businesses to disclose detailed information about their products—particularly in areas where public health or safety is an issue, such as with food or automobiles.

<i>FTC v. Sperry & Hutchinson Trading Stamp Co.</i> 1972 United States Supreme Court case

Federal Trade Commission v. Sperry & Hutchinson Trading Stamp Co., 405 U.S. 233 (1972), is a decision of the United States Supreme Court holding that the Federal Trade Commission (FTC) may act against a company's “unfair” business practices even though the practice is none of the following: an antitrust violation, an incipient antitrust violation, a violation of the “spirit” of the antitrust laws, or a deceptive practice. This legal theory is termed the "unfairness doctrine."

The unfairness doctrine is a doctrine in United States trade regulation law under which the Federal Trade Commission (FTC) can declare a business practice "unfair" because it is oppressive or harmful to consumers even though the practice is not an antitrust violation, an incipient antitrust violation, a violation of the "spirit" of the antitrust laws, or a deceptive practice.

In re Gateway Learning Corp, 138 F.T.C. 443 File No. 042-3047, was an investigatory action by the Federal Trade Commission (FTC) of the Gateway Learning Corporation, distributor of Hooked on Phonics. In its complaint, the FTC alleged that Gateway had committed both unfair and deceptive trade practices by violating the terms of its own privacy policy and making retroactive changes to its privacy policy without notifying its customers. Gateway reached a settlement with the FTC, entering into a consent decree in July 2004, before formal charges were filed.

The Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010, is uniform legislation for consumer protection, applying as a law of the Commonwealth of Australia and is incorporated into the law of each of Australia's states and territories. The law commenced on 1 January 2011, replacing 20 different consumer laws across the Commonwealth and the states and territories, although certain other Acts continue to be in force.

Consumer protection in the United Kingdom is effected through a multiplicity of Acts of Parliament, statutory instruments, the work of various government agencies and departments, and citizens' lobby groups. It aims to ensure the market economy produces fairness and quality in the goods and services people buy. The main areas of regulating consumer affairs include:

In Canada, passing off is both a common law tort and a statutory cause of action under the Canadian Trade-marks Act referring to the deceptive representation or marketing of goods or services by competitors in a manner that confuses consumers. The law of passing off protects the goodwill of businesses by preventing competitors from passing off their goods as those of another.

The Fiji Commerce Commission is a statutory organisation responsible for fair trade, competition (economics) and consumer protection regulation in the Fiji Islands. It was initially established in 1998 under the Commerce Act 1998 [Fiji]. The commission is an independent statutory body that seeks to protect consumers and businesses from restrictive and unfair trade practices. When it was established, the Commission was principally responsible for enforcing Fiji's competition policies and laws. It was modelled on the Australian Competition & Consumer Commission. In 2010 the Fiji government passed the Commerce Commission Act 2010 which saw the Commission taken on extra responsibilities that notably included price control. Two of Fiji's regulatory agencies, the Department of Fair Trading & Consumer Affairs and the Prices & Incomes Board ceased to exist as separate entities following this new law. The functions, operations and staff of the two agencies are now merged into the Commerce Commission.

Baiada Poultry is a privately owned company that produces poultry products throughout Australia. Its operations include broiler and breeder farms, hatcheries, processing plants, feedmilling and protein recovery. Its head office is at Pendle Hill, New South Wales with plants in Beresfield, Tamworth, Victoria, Queensland and South Australia. According to the company, it employs approximately 2,200 people. Baiada is one of Australia's largest poultry processing companies with a market share of more than 20%, producing the Lilydale Select and Steggles brand to retailers including Coles, Woolworths, IGA, Aldi, McDonald's, KFC, Pizza Hut, Red Rooster, Nando's and Subway.

FTC v. Balls of Kryptonite is an enforcement action brought in 2009 by the U.S. Federal Trade Commission (FTC) in United States District Court for the Central District of California. The defendant was Jaivin Karnani, a Southern California man, his company Balls of Kryptonite LLC, and several other corporate names they did business as. In 2011 the FTC secured a court order barring Karnani and Balls of Kryptonite from engaging in many of the deceptive business practices that had brought him to the agency's attention.

Central Consumer Protection Authority is a regulatory authority set up under Section 10(1) of the Consumer Protection Act, 2019 in relation to matters affecting rights of consumers by individuals or entities following improper trade practices or by display of inappropriate or wrong advertisements affecting public interest and helps promoting consumer trust by enforcing the rights of consumers through effective guidelines.

References

  1. "Consumer Law Review – A Discussion Paper" (PDF). Ministry of Consumer Affairs. June 2010.
  2. "The Fair Trading Act". Commerce Commission. 8 June 2022.
  3. "Fair Trading Act - Section 9 - Misleading and deceptive conduct generally".
  4. Fair Trading Act - Consumer facts Archived 5 December 2014 at the Wayback Machine . Consumer Affairs. Retrieved on 28 November 2014.
  5. "Fair Trading Act". www.consumer.org.nz. Retrieved on 26 November 2014.
  6. "Fair Trading Act - Section 18 - Trading stamp schemes prohibited".
  7. "Misleading consumers about their rights". Commerence Commission. 3 April 2018. Retrieved on 26 November 2014.
  8. Pilkington, Troy (21 January 2015). "New regime targets terms in contracts' fine print". stuff.co.nz.
  9. "Fair Trading Act". Consumer NZ. Retrieved 19 September 2018.