More Misleading Conduct -Yet Another Well Known Trader Charged - Consumer Lawyer Auckland - Dukesons Business Law Update

September 2016

This update isn't legal advice - if you want legal advice on any consumer law or other business law or commercial law issue, please contact me.

When it rains, it pours. I’ve commented on “Godreys”, “Bike Barn”, and now there's “Nurofen”. Want to be that there will be more? As a consumer lawyer in Auckland, I'm not surprised by these events. Consumer lawyers in Auckland and elsewhere will be very busy.

Traders need to avoid misleading or deceptive conduct in trade and there is now a provision against making unsubstantiated representations in trade. As to the former, "Nurofen" has felt the hot breath of the Commerce Commission breathing down its neck.

Many members of the commercial community will be aware that Reckitt Benckiser (Australia) Pty Limited (RBA), which markets Nurofen products in AUS was found guilty of misleading conduct when marketing and selling Nurofen as targeting 4 specific types of pain when exactly the same product was involved in each case. I sent an update around about this. Now, according to the Commerce Commission, Reckitt Benckiser (New Zealand) Limited (RBNZ) intends to plead guilty to similar charges brought by the Commerce Commission in NZ.

In my view, as a consumer lawyer, to market products in a way that suggests they are designed to target specific types of pain when the same product is involved in each case is cynical and disrespectful to consumers.

Some questions:

  • Did RBA and RBNZ seek legal advice in relation to the way that they promoted and sold the products?
  • If so, what was that advice?
  • If it wasn’t the advice that RBA and RBNZ wanted, did it make a commercial decision to ignore that advice e.g. because profit was more important than anything else?

The Commerce Commission recently published a report advising that there were a significant number of provisions in telco and electricity supplier contracts that the Commission considered were unfair and advising that the companies concerned were going to amend those terms. Some of those companies would have had the benefit of the best legal minds in revising their terms. Again, what advice did they get and depending on what it was, did they ignore it? One major telco has been repeated charged/prosecuted under consumer laws.

It’s excellent to see the Commerce Commission taking action against some companies that should know better. As consumers, we all deserve better. Publicity as to these matters may well impair the reputation of traders who don’t comply with the law.

New Zealand consumers aren’t entirely powerless. They can complain to the Commerce Commission where complaints are justified. In relation to say Nurofen, there may be a generic alternative on the market that does exactly the same thing, possibly even cheaper – consumers could turn to that other product.

Let's see what happens in relation to "natural health remedies", especially in relation to the new law relating to making unsubstantiated representations.

There are some uncertainties out there for reputable traders and even experienced lawyers. There are issues with our credit contracts legislation and it’s not always easy to advise on what is definitely an unfair term under the unfair contract terms regime. But some of the traders that the Commerce Commission have brought charges against or required them to amend their terms should know better and I suspect in some cases, probably did (it would seem hard to believe that at least some of the parties concerned didn't consult a consumer lawyer).

Post Script 3rd February 2017: Reckitt Benckiser (New Zealand) Limited (RBNZ) has been fined $1.08 million in the Auckland District Court for 10 charges relating to its Nurofen specific pain range products.

RBNZ admitted that between 2011 and 2015 its packaging of the products and representations on the website were liable to mislead consumers about the nature, characteristics and suitability of the products. The product packaging stated that the products “targeted” a particular type of pain, when this wasn’t the case. Each product contained exactly the same active ingredient and each worked identically to the other products.

According to the Commerce Commission, “RBNZ was made aware in 2011 and 2013 through a media article and a complaint to the Australian Therapeutic Goods Administration that the products were potentially misleading, yet continued to market and sell the products.”

In sentencing RBNZ, Judge Jelas described RBNZ’s behaviour as “highly misleading” and noted it was “blatantly apparent they were in breach of their lawful obligations to New Zealand consumers”. Judge Jelas noted that RBNZ had expressed its remorse for its conduct, but only after the Commission opened its investigation, having ignored previous warnings and publicity in the media.


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