Fair Trading Act 1986 Cheat Sheet

The Fair Trading Act 1986 ensures fair competition and protects New Zealand consumers from misleading conduct and unfair practices by requiring businesses to be honest and transparent.

Core Principles

• Prohibits misleading or deceptive conduct in advertising and sales.
• Ensures accuracy in claims about quality, price, and origin.
• Prevents unfair trading practices like bait advertising and pyramid schemes.
• Requires businesses to substantiate their claims.
• Promotes fair competition based on merit, not deception.
• Empowers the Commerce Commission for enforcement.
• Builds consumer trust through transparency and accountability.

Key Terms

• Misleading or Deceptive Conduct: Any action or statement likely to mislead or deceive consumers, regardless of intent.
• False Representation: Making untrue claims about goods or services, including quality, price, or origin.
• Unfair Trading Practices: Practices that harm consumers or distort competition, such as bait advertising.
• Bait Advertising: Advertising a product at a low price that is not genuinely available in reasonable quantities.
• Pyramid Selling: An illegal scheme where participants earn money primarily by recruiting new members, rather than selling products or services.
• Unsubstantiated Claims: Making claims about products or services without sufficient evidence to back them up.
• Commerce Commission: The New Zealand agency responsible for enforcing the Fair Trading Act.

Timeline

• 1986: Fair Trading Act enacted in New Zealand.
• Ongoing: Commerce Commission monitors compliance and enforces the Act.
• Ongoing: Businesses are required to ensure advertising and sales practices are truthful.
• Ongoing: Consumers are protected against misleading claims and unfair practices.
• Ongoing: Enforcement actions, including fines and court orders, are issued for breaches.