The Ministry of Consumer Affairs (Ministry) has released a discussion document on the redress and enforcement provisions contained in the Fair Trading Act 1986 and the Consumer Guarantees Act 1993.
The release of the discussion document follows the Ministry’s review of the Fair Trading and Consumer Guarantees legislation and a comparison of that legislation with similar laws in Australia, Canada, the United Kingdom and the United States.
In a recent press release, Consumer Affairs Minister, Judith Tizard, stated that ‘this review is part of government’s commitment to making sure that consumer law is relevant and up to date. We want to ensure that New Zealand consumers are protected and that there is a fair and competitive environment for business’.
Consumer protection legislation is designed to protect both consumers and businesses from failures to meet quality guarantees, unsafe products and misleading or deceptive conduct. The Ministry considers that, for consumer protection legislation to be effective, enforcement tools and penalty provisions must be supported by a range of escalating sanctions to encourage compliance.
While New Zealand’s existing consumer protection laws are generally consistent with foreign legislation, the Ministry’s analysis of the enforcement tools found in other similar jurisdictions overseas has led the Ministry to identify a number of overseas enforcement provisions could be adopted to strengthen the enforcement of New Zealand’s consumer protection legislation.
The overseas enforcement provisions to be considered for use in New Zealand include:
- The prohibition of unfair terms in consumer contracts.
- The ability to remove unsafe products from sale during an investigation and warn the public of the potential danger of those products.
- The issue of cease and desist orders to prevent a trader continuing with alleged misconduct.
- The issue of banning orders to prevent serious offenders from continuing to supply goods or services, for a set period or indefinite period of time, and prevent them from continually misleading or deceiving consumers.
- The issue of substantiation notices that would place the onus of proof of claims on the trader - not the enforcement agency.
- The use of Court enforceable undertakings, if a trader contravenes the terms of a previous settlement with the Commerce Commission.
- The strengthening of the Commerce Commission's interview powers to enable it to require a person to answer questions and give evidence.
Submissions on the discussion document are being called for by the Ministry of Consumer Affairs and close on 29 June 2006. The discussion document is available at: http://www.consumeraffairs.govt.nz/policylawresearch/enforcement-review/paper-two/.
Interested in making a submission?
We are reviewing the discussion document in detail. We encourage you to call us to discuss any of the proposals contained in the discussion document and to consider making a submission.
If you have any other compliance concerns or issues or would like our compliance team to assist in reviewing or updating your existing compliance programme, please contact the authors.
This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.