Parliament has passed the Fair Trading Amendment Bill 2019 – introducing important changes to the Fair Trading Act 1986 (the FT Act).
Parliament has passed the Fair Trading Amendment Bill 2019 – introducing important changes to the Fair Trading Act 1986 (the FT Act).
There are new obligations for businesses and new protections for consumers and small businesses. The Commerce Commission enforces the FT Act, so we are also responsible for enforcing these changes.
This summary highlights the main changes, where you can find initial information, and what further guidance you can expect from us in future.
Significant new protections
There are some significant new protections to address unfair practices, including:
Traders cannot engage in unconscionable conduct – the term itself is not defined in the FT Act, but there is a non-exhaustive list of factors to consider when assessing whether conduct is ‘unconscionable’. This includes whether unfair pressure or tactics were used, any undue influence, and whether parties acted in good faith.
The unfair contract terms framework now covers standard form small trade contracts, which previously only applied to standard form consumer contracts.
Consumers can direct uninvited direct sellers to leave or not enter their property.
These important changes will come into effect on 16 August 2022. This gives businesses a year to review their practices and standard form small trade contracts, seek legal advice if needed, and be ready to comply on time.
The Commission is in the process of preparing guidance on some of the new changes – more on this below.
Other immediate changes to the FT Act
Other provisions come into force straight away on 17 August 2021, including:
Management banning orders are broadened to capture a wider scope of conduct.
Businesses selling extended warranties over the phone will have 5 working days after the date the agreement is made to give consumers a written copy of their extended warranty agreement.
More detail on some of the significant changes can be found here. A full version of the Fair Trading Amendment Bill 2019 can be found here.
Guidance
We will continue to develop and publish guidance on our website for some of these new provisions. This guidance will cover the changes relating to unconscionable conduct and unfair contract terms protections for small trade contracts. To be kept up to date with any new guidance, please register here.
