Consumer Law Reform in New Zealand - New consumer amendment Acts now law

New Zealand's consumer law is more closely aligned with Australian consumer law now that the six amendment Acts comprising the consumer law reform are law.

This overview is derived from the Acts, commentary to the Bill and the discussion paper.

Background

The Consumer Law Reform Bill (“Bill”) passed its third reading in Parliament on 10 December 2013.  This means that the following amendment acts that comprise New Zealand’s consumer law reform are now law:

  • Fair Trading Amendment Act 2013
  • Consumer Guarantees Amendment Act 2013
  • Weights and Measures Amendment Act 2013
  • Secondhand Dealers and Pawnbrokers Amendment Act 2013
  • Carriage of Goods Amendment Act 2013

The Unsolicited Goods and Services Act 1975, the Layby Sales Act 1973, and the Door to Door Sales Act 1967 are repealed and respective new provisions are contained in the Fair Trading Amendment Act 2013. 

The Auctioneers Act 1928 was also repealed by the Bill and replaced by a new Auctioneers Act 2013.

Implications for businesses

In our last consumer law update, we provided an explanation of some of the key provisions that will affect businesses.  These provisions have remained largely unchanged in the amendment Acts. 

The Acts contribute to a trading environment in which the interests of consumers are protected, and businesses compete effectively, and consumers and businesses participate confidently.

A summary of the purpose and key amendments in the Fair Trading Amendment Act 2013 and Consumer Guarantees Amendment Act 2013 is set out in bullet point form.

Fair Trading Amendment Act 2013

The Act:

  • prohibits certain unfair conduct and practices in relation to trade
  • promotes fair conduct and practices in relation to trade
  • provides for the disclosure of consumer information relating to the supply of goods and services
  • promotes safety in respect of goods and services

Businesses should be aware of the provisions in the Act, including but not limited to the provisions relating to:

  • unsubstantiated representations (distinct from false and misleading representations) (ss 12A to 12D)
  • unsolicited goods and services (ss 21A to 21D)
  • unfair contract terms in standard form consumer contracts (s 26A, and ss 46H to 46M)
  • disclosure of trader status on internet sites (s 26B)
  • uninvited direct sales which is defined more widely than just door to door sales (ss 36K to 36S)
  • extended warranties particularly disclosure obligations (ss 36T 36W)

Further, businesses should familiarise themselves with the new provisions relating to ‘no contracting out’.

Consumer Guarantees Amendment Act 2013

The Act provides that consumers have certain guarantees when acquiring goods or services from a supplier, including:

  • that the goods are reasonably safe and fit for purpose and are otherwise of an acceptable quality
  • that the services are carried out with reasonable care and skill

There are certain rights of redress against suppliers and manufacturers if goods or services fail to comply with a guarantee. 

There are new guarantees relating to gas, electricity and auctioneers and delivery of goods.  In addition, there are new obligations and restrictions relating to contracting out of the act, and collateral credit agreements.

What are some of the things businesses can be thinking about now?

In our last consumer law update, we provided guidance in relation to the focus and considerations of businesses with a view to the consumer amendment acts, comprising the consumer law reform, being passed as law. 

The salient focus for businesses should be on carrying out a review of existing compliance plans and risk management strategies, to ensure that these are amended in light of the new laws before the transitional periods come to an end.  As a reminder, some of the key issues to consider could include:

  • Do your ‘standard form consumer contracts’ contain any ‘unfair contract terms’?
  • Do your extended warranty agreements and materials need to be amended to ensure compliance with the new laws?
  • Do your existing processes and guidelines concerning door to door sales / uninvited direct sales comply with the new laws?
  • Do your existing processes and guidelines concerning internet sales and advertising comply with the new requirements?
  • Whether there has been a shift in the market strategy, such that there is increased use and reliance on internet trading and marketing?
  • Do you need to review your policies and guidelines to ensure staff do not make unsubstantiated representations?
  • Whether there are appropriate training opportunities for employees to ensure that they understand and are aware of their obligations to consumers, and how this assists risk management?

Ensuring that your compliance plans and risk management strategies have been amended based on the new laws will lessen the risk of an inadvertent breach of the numerous provisions now comprising the new consumer law in New Zealand.

If you would like further information on any issue raised in this update please contact:

Brian Joyce, Principal

DDI:     +64 9 377 8419
Email:   brian.joyce@clendons-ns.co.nz

Krystle Gardner, Solicitor

DDI:     +64 9 965 2662

Email:   krystle.gardner@clendons-ns.co.nz

 

If you would like to subscribe to Clendons North Shore communications, please email Louise Gardner at louise.gardner@clendons-ns.co.nz.

Disclaimer

This publication is necessarily brief and general in nature. You should seek further information before taking any action in relation to the matters dealt with in this publication.