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 chapter “The Disputes Tribunal”).
- Ask the Commerce Commission to investigate. 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. Action the Commission can take includes:
- 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 an infringement notice (similar to a parking ticket) 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. Infringement notices for fair trading offences carry a $1,500 fine (“infringement fee”), but the trader doesn’t get a criminal record.
- 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 those less serious offences where the Commerce Commission has the option of an infringement notice (see above), the maximum penalty (if the Commission brings a criminal prosecution) is $10,000 for individual traders and $30,000 for companies.
- 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.
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