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Automatic guarantees when buying from a business

Buying services – Automatic guarantees

What sorts of services are covered Consumer Guarantees Act?

Consumer Guarantees Act 1993, ss 2, 41

The Consumer Guarantees Act covers services that are usually bought by a consumer for personal, domestic or household use. Services include:

  • trade services (for example, plumbers and builders)
  • insurance, banking and lending services
  • professional services (for example, lawyers)
  • accommodation (for example, motels, hostels and boarding houses)
  • the supply of telecommunications or water.

What sorts of services are not covered?

Consumer Guarantees Act 1993, ss 2, 41, 56

The Consumer Guarantees Act does not cover:

  • services supplied by someone who is not in business (note that tradespeople who work by themselves are still covered)
  • services that are normally used for business purposes (for example, business payroll services)
  • services that are provided by paying a fee required by law (for example, rates paid to your city council for water, sewage, etc.)
  • services provided to you by a charity.

What protections do I have if the Consumer Guarantees Act doesn’t apply?

Even if the services you buy are not covered by the Consumer Guarantees Act, you may have rights under:

Automatic guarantees for services under the Consumer Guarantees Act

What automatic guarantees do I have for services?

Consumer Guarantees Act 1993, ss 28–31

The Act guarantees that the service will be:

  • carried out with reasonable skill and care
  • fit for the purpose that you told the supplier the service needed to be fit for
  • completed within a reasonable time (when there is no agreement about time)
  • carried out at a reasonable price (when there is no agreement about price). As with goods, if you are charged more than a reasonable price, you do not have a right to cancel the purchase. You can only refuse to pay a price that is unreasonable. If you have already paid more than is reasonable, it is too late and you do not have a right to a refund.

What you can do if there’s a problem with services

Consumer Guarantees Act 1993, ss 32–38

You have the right to have the problem fixed by the service provider if the services fail to meet any of the guarantees required under the Consumer Guarantees Act.

If the problem can be fixed

If the problem can be fixed, you must first give the service provider a chance to fix it. They must fix the problem within a reasonable period of time and at no extra cost to you.

If the problem can be fixed, but the service provider does not fix it

If you give the supplier a reasonable opportunity to fix the problem but they refuse, or do not fix the problem within a reasonable time, you can:

  • cancel the contract for the services, and you will be entitled to a refund of money you have already paid for the service, or
  • pay to get the failure fixed elsewhere and claim the reasonable costs of doing so from the supplier.

You can also claim compensation for reasonably foreseeable loss caused by the problem with the services.

If the failure is substantial or cannot be fixed

If the failure is substantial or cannot be fixed, you can:

  • cancel the contract for the services, and you will be entitled to a refund of money already paid for the services, or
  • claim compensation from the supplier for the reduction in the value of the services provided.

In addition, you can claim compensation for reasonably foreseeable loss caused by the problem with the services (for example, the costs of cleaning carpet that has paint spilled on it by a painter who did not put down drop sheets when painting).

When is a failure “substantial”?

A problem with a service will be substantial if:

  • a reasonable consumer would not have bought the service if they were fully aware of the problem
  • the product of the service is substantially unfit for its usual purpose, and it cannot easily be fixed within a reasonable time
  • the product of the service is unfit for a particular purpose that you told the service provider you wanted to use it for, and the problem cannot easily be fixed within a reasonable time
  • the product of the service cannot be expected to achieve a particular result that you told the service provider you wanted, and the problem cannot easily be fixed within a reasonable period of time
  • the product of the service is unsafe.

Did this answer your question?

Consumer protection

Where to go for more support

Community Law


Your local Community Law Centre can provide free initial legal advice and information.

Consumer Protection


Consumer Protection helpline: 0508 426 678 (0508 4 CONSUMER)

Email: cpinfo@mbie.govt.nz

The Consumer Protection website has useful information on a range of consumer topics. Consumer Protection is part of the Ministry of Business, Innovation, and Employment (MBIE).



Phone: 0800 345 123

FinCap can help you with budgeting information online or on the phone. They may also suggest a local budgeting service to help you with debt and other budgeting issues.

Consumer NZ


The Consumer NZ website provides a wide range of information on consumer issues and template letters you can use to write to traders to enforce your rights. You can also order “Do Not Knock” stickers to deter uninvited door to door knockers on their website.

Citizens Advice Bureau


Phone: 0800 FOR CAB (0800 367 222)

Citizens Advice Bureaux have volunteers trained in consumer law who can provide you with information and advice about consumer problems.

Commerce Commission


Phone: 0800 943 600

Email: contact@comcom.govt.nz

The Commerce Commission enforces the laws against misleading and deceptive conduct by traders (the Fair Trading Act) and the consumer credit legislation (the Credit Contracts and Consumer Finance Act). The Commission provides information on these areas on its website.

Consumer rights in another language


This site by the Commerce Commission has information about typical situations consumers find themselves in, in five different languages.

Product Recalls


This site lets you know which products have been “recalled” due to safety issues or product defects. You can generally return a recalled product to the place where you bought it to be repaired or replaced.

Motor Vehicle Traders Register


Phone: 0508 MOTOR TRADERS (0508 668 678)

Check to see if a motor vehicle trader is registered.

Motor Vehicle Disputes Tribunal


Phone: 0800 268 787

The Motor Vehicle Disputes Tribunal deals with disputes of amounts up to $100,000. It can be more if both parties agree in writing.

Personal Properties Securities Register (PPSR)


Search the PPSR register to see if there is any security interest registered against a vehicle. This can be done for a small fee by registering to check online

Proceedings in the District Courts

The Ministry of Justice website has information about making or responding to a claim in the District Courts. See: www.justice.govt.nz and search “claims to civil court”.

Buying a car privately

YouthLaw has produced a video on buying a car privately.
See: www.youtube.com/watch?v=aK8irFAn1as

New Zealand Police


Check to make sure a car that you’re considering buying hasn’t been listed with the police as stolen.

Dispute resolution schemes

There are four dispute resolution schemes for consumers dealing with lenders and other credit providers.

Financial Services Complaints Limited – www.fscl.org.nz

Phone: 0800 347 257

Email: info@fscl.org.nz

Insurance & Financial Services Ombudsman
Phone: 0800 888 202

Email: info@ifso.nz

Banking Ombudsman – www.bankomb.org.nz
0800 805 950

Email: help@bankomb.org.nz

Financial Dispute Resolution – www.fdrs.org.nz
0508 337 337

Email: enquiries@fdrs.org.nz

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