Fair Trading Act

The Fair Trading Act 1986 may provide you with remedies if the people supplying you with goods and services mislead you or make false representations.

How the Fair Trading Act applies to house building

The Fair Trading Act 1986 (FTA) prohibits:

• Misleading or deceptive conduct.
• False or misleading representations.
• Unfair trading practices.

It applies to anyone in trade and to the goods or services they sell, or offer for sale.

The FTA treats goods and services in essentially the same way. It covers all advertising and selling of goods and services. It does not cover private sales.

The Act is administered by the Ministry of Consumer Affairs and is enforced by the Commerce Commission.

Examples of misleading or deceptive conduct

You have been misled or deceived if the information you receive about goods or a service gives you a false impression.

For example, you see an advertisement in the paper for granite benchtops. You order one and when it arrives you find it is only granite veneer. Or a real estate agent takes you to look at a section. You buy it but discover part of it belongs to the neighbours.

In the examples above, both the shop selling the benchtops and the real estate agent misled you.

Examples of false or misleading representations

You have had a false representation made to you when the information you receive about goods (or services) is untrue.

For example, you see bathroom vanities advertised at $250. You order one and when it arrives you are billed $350. The supplier claimed the goods were cheaper than they really were.

Or a tradesperson tells you that he or she is a member of a trade association when he or she is not.

Or a builder gives you a quote, but fails to tell you that GST was not included, so the final bill is a lot higher than expected. The builder has breached the FTA, section 13, by making a false or misleading representation about the price of goods or services.

Example of unfair trading practices

An unfair practice is a selling method which is misleading or unfair.

For example, you make a decision to buy a package for a section and house because the company is offering a trip to Fiji with every package sold. But when you receive the details you find that the 'free' trip does not include airfares! The prize is not the same as the one they offered.

Remedies under the FTA

Where a trader breaches the FTA and you suffer a loss as a result you can claim your losses from the trader through the Court or a Disputes Tribunal.

You could also make a complaint to the Commerce Commission (whether or not you have suffered loss). Its role is to enforce the FTA by investigating and prosecuting traders. You can send your complaint to the Commission via its website or contact: 0800 943 600.

The Commerce Commission can:

• Apply for a Court order to stop the offence continuing.
• Prosecute and fine the trader.
• Ask the Court to order compensation for consumers who have suffered loss.
• Ask the Court to require traders to publish advertisements correcting false or misleading statements.

For more information, see the consumer.org.nz guide to The Fair Trading Act.