Understand your compliance obligations

The Fair Trading Act's primary focus is on anyone in trade – from a bank, hotel or department store through to the local plumber or corner dairy.

It applies to all aspects of the promotion and sale of goods and services – from advertising and pricing to sales techniques and financing. Businesses cannot contract out of their obligations under the Fair Trading Act.

The Act also applies to certain activities whether or not the parties are 'in trade' - such as employment advertising, pyramid selling, and the supply of goods covered by Product Safety and Consumer Information standards regulations.

In most cases it is not relevant whether a business intends to deceive or mislead, the issue is whether its conduct is liable or likely to deceive or mislead. Both businesses and individuals can be prosecuted for breaching the Act. When the Act is breached by a staff member, the company they work for can be held liable. Likewise, where a business acts unlawfully, its directors, managers, agents and employees, as well as anyone else involved in the offending conduct – such as wholesalers or retailers - can all be held liable.

Compliance requires businesses to put themselves in the shoes of their customers and examine what they are doing and saying from those customers' perspectives. It also involves having good staff training and checking systems in place. The Act protects businesses that comply, and in this way promotes the Commission's aim of achieving effective competition.

The Act enables both businesses and consumers to seek their own remedies when its provisions are breached. The Commission is also empowered to take enforcement action and will do so when allegations are sufficiently serious to meet its enforcement criteria. Penalties can be onerous and the resulting damage to a company or individual's reputation can be severe.

The Commission provides some guidance to assist both consumers and businesses in understanding their obligations, rights and the consequences of non-compliance.