Resolving an investigation

In the course of some investigations, the Commission may reach the finding that no breach has occurred, or that it is more appropriate for another enforcement agency (such as the Police or the Serious Fraud Office) to investigate the matter, and therefore that no further enforcement action is required by the Commission.

Once the Commission is satisfied that a breach of the Fair Trading Act has been found, it has a number of options available for resolving the investigation.

The Commission applies its enforcement criteria to guide its decision about the most appropriate way in which to resolve an investigation.

In determining the best resolution, the Commission considers both the individual circumstances and the seriousness of the breach, including the impact on consumers, other businesses, and the nature of the behaviour and the strength of the evidence.

In all cases, the Commission's primary purpose is to promote dynamic and responsive markets so that New Zealanders benefit from competitive prices, better quality and greater choice. Thus, the Commission's actions are aimed at stopping businesses continuing to undertake prohibited practices, deterring others from beginning or repeating such practices, and punishing those that breach the Act.

Where the Commission assesses that it is necessary to act urgently to prevent a particular person or consumers from suffering further serious loss or damage, or in the general interests of the public, it may apply to the High Court for an injunction.

In resolving an investigation, the Commission may:

  • issue a compliance advice letter where there is a possible or likely, but not serious, breach of the Act. The aim of this option is to inform the person or business in question and deter future illegal behaviour
  • issue a warning letter, where there is a likely breach of the Act. The aim of this option is to inform, stop the behaviour in question, and deter the business from repeat or new illegal behaviour
  • enter into a settlement where there is a likely and serious breach of the Act, which the business acknowledges. The aim of this option is to modify the behaviour of the business in question, inform others and, where appropriate, seek redress for affected parties through the terms and conditions of the settlement. Settlements are entered into in circumstances where the Commission holds the view that the benefits obtained through the terms of the settlement provide a more appropriate outcome
  • decide to prosecute where there is a likely and serious breach of the Act. The aim of this option is to modify or stop the behaviour and penalise the business in question, inform and modify the behaviour of others and, where appropriate, seek redress for affected parties.

Prosecution

The Commission may take criminal or civil action under the Fair Trading Act. Anyone can take private action under the Act.

Civil action is taken in relation to declaratory orders and other relief for a variety of unfair trading practices under the Act; and may include the Commission seeking interim injunctions during the course of an investigation to prevent or stop unlawful activity. The Commission may seek permanent injunctions at the conclusion of an investigation.

Criminal action is taken in relation to offences under the Act.

Under sections 9 (which covers misleading and deceptive conduct generally),14(2) and 23 of the Act, only civil proceedings are possible. Such proceedings cannot result in fines, but may result in injunctions, orders to pay money and other remedies.

Civil proceedings under the Act can take place in the High Court, the District Court, the Disputes Tribunal or the Motor Vehicles Disputes Tribunal, depending on the type of order sought and the amount of the claim. Criminal proceedings are taken in the District Court.

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