Protections against misleading or unfair trading
Enforcing the rules against misleading or
unfair trading
What can I do if a trader has engaged in misleading or unfair trading?
Fair Trading Act 1986, ss 37–46; Fair Trading (Infringement Offences) Regulations 2014
You can start by asking the trader to fix the situation. If that doesn’t work, you can:
- Take the matter to the Disputes Tribunal, for matters up to $30,000 (see: “The Disputes Tribunal”).
- Apply to the High Court for an order to stop the trader breaching the Act (“an injunction”), or for compensation. For applications to the High Court, you’ll usually need help from a lawyer.
- Inform the Commerce Commission (see below).
What can the Commerce Commission do against misleading or unfair trading?
The Commerce Commission is the government agency responsible for enforcing the Fair Trading Act. The Commission receives complaints about behaviour that appears to breach the Act and then decides what action to take, if any.
The Commission receives thousands of complaints each year and so largely focuses on issues that cause widespread harm. This means that in most cases the Commission will not be able to obtain a remedy for you. However, information given to the Commission helps them to investigate behaviour and ensure businesses are complying with the law.
The Commission can take action if they choose, including:
- warning the trader
- coming to a settlement with the trader
- asking the trader to provide a written “enforceable undertaking” (the Commission can go to the courts to have the undertaking enforced if the trader later breaches it)
- issuing the trader with a fine of up to $2,000 for certain less serious breaches, such as when a door-to-door seller fails to include all the information required by the Act in their sale agreements
- bringing a criminal prosecution against the trader:
- For more serious offences under the Fair Trading Act (such as making a false statement about goods), individual traders can be fined up to $200,000 and companies can be fined up to $600,000.
- For less serious offences where the Commerce Commission has the option of a fine (see above), they can also bring a criminal prosecution, but the maximum penalty is $10,000 for individual traders and $30,000 for companies.
