Consumer Guides > Fair Trading ActFair Trading Act Content kindly supplied by consumer.org.nz.
The Fair Trading Act 1986 is one of the cornerstones of consumer law. It protects you against being misled or treated unfairly by traders or shops.
The Fair Trading Act applies to everyone in trade. As well as traders and shops, the Act covers government agencies and state-owned enterprises. Most of the Act does not cover private sales.
The Fair Trading Act applies to online auctions when you buy from a professional trader - but does not apply when you buy from a private, "one-off" seller. See our guide to online auctions and the law for more information.
The difference between the Fair Trading Act (FTA) and the Consumer Guarantees Act (CGA) is that, in general, the FTA covers claims about products and services prior to sale and the CGA covers the quality of those products and services after they have been bought.
Your rights under the Fair Trading Act:
Misleading or deceptive conduct
If you are told things by a shopkeeper that give you a false impression about goods you are buying, then you have been misled or deceived. For example, if you discover that bags advertised as leather are actually vinyl. Or if you buy faulty goods and the shopkeeper incorrectly tells you that you are not legally entitled to a refund, replacement or repair.
False representations
When information given to you about goods and services is not true, then a false claim has been made. For example, if you buy a shirt with a "Made in Italy" label and find it actually came from a factory in Korea.
The word "representations" covers any situation where a trader claims something about their product or services, either verbally or in writing. It can even cover cases where a trader doesn't say something. For example, neglecting to mention that prices exclude GST.
Unfair practices
Unfair practices are selling methods which mislead you. Unfair practices which are illegal under the Fair Trading Act include:
Offering prizes or gifts without intending to supply them, or not supplying them as offered.
Bait advertising - when a seller advertises particular goods or services at a particular price, and doesn't intend supplying or selling reasonable quantities at that price.
Making misleading claims about types of businesses. For example, claiming you can make $1000 a week selling cosmetics from home, when actually you would have to work about 20 hours a day, 7 days a week to make that sort of money.
Pyramid selling schemes
Demanding or accepting payment without intending to supply the goods or services, or without believing they'll be ready at a specified time, or intending to supply different goods or services.
Using physical force, harassment or coercion when supplying goods or services.
Making a complaint
If you're unhappy with a product or service, first try to sort it out with the trader concerned. But if you can't make headway, you or anyone else can take criminal action under the Fair Trading Act.
You can also apply to the High Court for an injunction to stop the Act being breached.
The best option for consumers with small claims is civil action, most often through a Disputes Tribunal.
Disputes Tribunals can hear cases for claims up to $7500 or $12,000 if both parties agree. Although you can take claims for specific misrepresentations under the Act (such as about the price or quality of goods), bizarrely, cases under the general prohibition on misrepresentation can't be heard in tribunals.
A tribunal can award civil damages, which could include your getting compensation or your money back. But only the courts can impose fines.
This buying checklist is brought to you by consumer.org.nz. Last reviewed Apr 2010.
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