Trust Me – really? Consumer Lawyer Auckland – Dukesons Business Law

September 2017

This Blog isn't legal advice – if you need legal advice on any consumer law issue, or any other business law or commercial law issue, please contact me. I'm a contract lawyer and consumer lawyer in Auckland who provides advice on contract law and consumer law issues and on a wide range of business law or commercial law issues.

Heat pump supplier Fujitsu General New Zealand Limited is the latest in an increasing long line of companies which, no doubt, would expect consumer trust based on what the companies consider to be reputable brands, but which have fallen well below the level of conduct that should be expected of them.

  • Fujitsu has been fined $310,000 in the District Court for making unsubstantiated or misleading claims about the energy efficiency and performance of some of its heat pumps. It pleaded guilty to seven charges under the Fair Trading Act (FTA) for unsubstantiated or misleading claims made over a period of more than two years.
  • Apparently, on its website and in promotional pamphlets, Fujitsu made claims such as “NZ’s most energy efficient heat pump range” and that a particular heat pump range delivered “better heat efficiency” and constituted “the most efficient system ever”. The Commerce Commission says that Fujitsu had no reasonable grounds to make those claims at the time of publication.
  • It would seem that Fujitsu also made false or misleading claims that its e3 heat pump delivered “$4.92 heat for a $1 power” and that it was a “breakthrough energy saver – delivers $4.57 of heat for every $1 of power used”. The Commerce Commission says that this performance was achieved only under laboratory conditions and was not likely to be achievable by consumers in real-world conditions.
  • In the Wellington District Court, it was said that “the dissemination of information was significant and significantly inaccurate” and that "all the facts must have been known to the defendant company including the limitation of the test results.” From the Commerce Commission, it was said that “The efficiency of these heat-pumps was represented as a key selling feature, but without a proper scientific foundation for the claims.. The penalty illustrates that businesses must have a reasonable basis for the claims they make about their products at the time they make those claims, and claims must not be misleading.

The information above is taken from a Commerce Commission publication. it would seem that at best, management has acted carelessly, and at worst, in at least one instance, grossly negligently. I don’t know if it sought legal advice and if it did, what that advice was. It would be reasonable to expect that large companies with deep pockets would require their marketeers to clear advertising with lawyers having experience in consumer law – surely marketeers wouldn’t be given free reign? At the very least, one would expect that the marketeers would have guidelines that set out basic law, such as the requirement not to act on unsubstantiated representations and not to engage in misleading or deceptive conduct.

Probably, most consumers won’t learn of Fujitsu’s conduct. Perhaps companies rely on this, so that they will continue to be perceived to be reputable, whether or not that’s merited. It’s disappointing to see yet another well-known company/brand engaging in conduct that good legal advice, if adhered to, would have avoided. Trust is something that’s earned and it’s difficult to see how an increasing number of large “reputable” companies could have lost their way unless they have decided that profits made until they are caught are worth it. That may seem to be a harsh conclusion, but it’s difficult to come to any other.

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