A guide to navigating your obligations under the Fair Trading Act

The Fair Trading Act (the Act) protects consumers against being misled or treated unfairly by traders or shops. The Act also requires businesses to provide specific information about their goods and services to consumers and adhere to safety standards.

It is important that your business complies with the Fair Trading Act and provides consumers with accurate information. Pricing and advertising should not mislead or deceive consumers, intentionally or unintentionally. Consumers are easily persuaded to make purchasing decisions by advertising or a seemingly good price for products and services.

What is the Fair Trading Act

The Fair Trading Act, regulated by the Commerce Commission, aims to protect consumers from misleading and deceptive conduct, unfair trading practices, and to promote the disclosure of consumer information and product safety.

The Act applies to all commercial activities, trades, professions and businesses. This includes online sales. It also applies to everything involved in the promotion and sale of a good or service, including advertising, pricing and even sale methods.

As a retailer, you cannot contract out of your obligations to consumers under the Act. However, there are some exceptions when dealing with other traders where you may be able to contract out, should you agree. You can find out more about that process and the requirements on the Commerce Commission’s website.

Watch our webinar on Avoiding Breaches under the FTA

Our legal partner, Ford Sumner Lawyers, reviews common mistakes that employers can avoid to ensure compliance with the Fair Trading Act.

Your responsibilities

As a business, you must not mislead or deceive consumers about the things you sell, including anything that is written or said about the product or service. This includes advertising, impressions from images and information that is left out that may create a false or misleading impression.

It is of no material difference if you did not intend to mislead. You cannot rely on things such as fine print to correct any potentially misleading impressions or to hide important information. Misleading advertising includes print, TV, radio, online or digital and social media.

Additionally, you are required to adhere to specific product and service standards regarding safety and communication of certain information, as dictated by the regulations for your specific products or services.

Retail NZ has prepared this guide to take you through the basics of the Fair Trading Act. However, retailers should not rely solely on this resource, as there may be specific circumstances that pertain to your business that are not covered here.

For further guidance and detailed information, retailers should:

Refer to the Fair Trading Act legislation,
Refer to guidance provided on the Commerce Commission’s website, and
Where necessary, seek legal advice on how the law applies to your specific circumstances.

Retail NZ

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