The Commerce Commission has released its 2016 Consumer Issues Report, presenting a picture of issues affecting New Zealand consumers.

The report takes a detailed look at the complaints received by the Commission as well as looking at the wider consumer environment and the influences the economy and technology have on consumers. Based on analysis of information from a wide range of sources, including the Commission’s own data, the report also identifies emerging risks that have the potential to affect markets or consumers.

Commerce Commission Chairman Dr Mark Berry said, “This is the second year we have released the report publicly and once again it highlights some interesting trends in complaints. Consumers complain to the Commission most about price (26%), goods (23%) and services (22%), while one quarter of our Fair Trading Act complaints relate to just 21 traders. Complaints in a number of areas have increased significantly since 2013 with motor vehicle retail complaints increasing by 70%, complaints about contracts doubling and complaints about debt collection significantly increasing.”

Non-bank lenders feature prominently this year with complaints about non-disclosure, targeting of vulnerable consumers and irresponsible lending. For example, while finance companies make up only 3% of the credit market they account for 43% of credit-related complaints to the Commission.

“We produce this report primarily as an internal planning tool for the Commission which helps us to understand the consumer environment and prioritise our efforts where it will have the greatest impact for consumers and more meaning for businesses. However, we choose to share the report publicly as we believe the information is of wider interest and benefit to consumers, traders, advocates and community groups. We are grateful to all the organisations that have contributed to making this report such a valuable resource,” Dr Berry said.

The full report and complaints infographic can be found on the consumer reports page.

Background

What trends did the complaints data highlight in the 2016 report?

Complaints received by the Commission are looked at in-depth in the report, highlighting some interesting trends:

  • Online trading continues to generate around a third of Fair Trading complaints, more than twice the level generated by purchases made in physical stores
  • Telecommunication providers and domestic appliance retailers continue to generate the most complaints
  • 25% of Fair Trading complaints were related to just 21 traders
  • Finance companies are the lender in 43% of credit-related complaints
  • Complaints about debt collection have increased significantly
  • Industry associations featured frequently in cartel cases.

What issues and risks are identified in the 2016 report?

The report identifies 41 current issues and emerging risks to consumers and markets, with the likelihood and detriment of each issue and risk assessed to determine a harm score. Those identified as having a very high harm score and as such having the greatest potential impact to consumers are:

  • Disproportionate number of complaints generated by a small number of traders (in particular the telecommunications and domestic appliance retail industries)
  • Misrepresentation of products in the building industry
  • Misrepresentation of consumers’ rights by traders
  • Growth of online sales increases the potential for consumers to be misled
  • Importation of unsafe products (eg, baby walkers and cots)
  • Disproportionate number of complaints about the practices of non-bank lenders
  • Non-disclosure by lenders
  • Vulnerable consumers being targeted by some traders and lenders
  • Participation in industry associations enabling anticompetitive conduct.