Warnings for Retailers of Products and Services – Consumer Lawyer Auckland – Dukesons Business Law

May 2017

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

For many businesses, selling is hard work, especially in the face of competition in a small market place. It isn't surprising therefore that many businesses, large or small, will try to push the boundaries of what’s legal and what isn’t. Some will do that anyway, because they have low morals and little respect for consumers.

The Commerce Commission has issued an open letter to retailers to encourage retailers to improve their pricing practices. Prior to this, there have been a number of instances of the Commerce Commission dealing to reasonably high profile businesses for having adopted inappropriate marketing and/or pricing strategies. Substantial penalties were imposed by the courts in a number of instances. It seemed reasonable to conclude that the guilty parties either hadn't sought legal advice or had ignored legal advice. (It’s always possible that some didn’t seek legal advice at all.) I’ve previously published blogs on some of those matters.

Consumer lawyers and commercial lawyers like me are no different to anyone else. We see persistent and regular advertisements by some particular traders, advertising promotions and sales. A reasonable impression is that the products or services offered by these traders are always subject to some sort of promotion or sale. One can only be sceptical about the advertisements.

The open letter from the Commerce Commission reveals its concerns about sharp practices such as hiding important information in the fine print, often tucked away in some obscure space; advertising discounts or sales when the price is in the permanent price; advertising that prices are the lowest or cheapest prices when they aren’t.

A business doesn’t have to be a retailer to be guilty of misleading or deceptive conduct under the Fair Trading Act - misleading or deceptive conduct can occur in all manner of circumstances. Where there is misleading or deceptive conduct, commercial parties as well as true consumers can complain, either by way of making a complaint to the Commerce Commission or by bringing proceedings themselves where they have been affected. However, the Commerce Commission is particularly concerned about true consumers.

Especially where true consumers are concerned and a contract is a standard form contract, the Fair Trading Act requires that terms mustn’t be unfair. So, retailers need to consider that as well.

The fines for contravening the provisions of the Fair Trading Act can be substantial, up to $600,000 for a company (for each breach), and up to $200,000 for an individual (for each breach).

No amount of advice or warning will have any effect on unscrupulous traders. For the rest, why not “man up” and be honest and transparent with marketing and pricing? Most of us, even business lawyers, are consumers from time to time.


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Telephone: +64 9 379 4556 Mobile: 021 404 306. Fax: +64 9 379 4557 Email: steve@dukesons.co.nz