The Commerce Commission and Ministry of Consumer Affairs will be visiting Timaru businesses and speaking at meetings on June 18 and 19.

Commission Fair Trading Manager Rachel Leamy said they will be talking about the Fair Trading Act and the Consumer Guarantees Act.

"We will be talking about two of the most important laws that affect businesses every day," Ms Leamy said.

"The aim is to improve business people's knowledge of the law. Where there is no Commission or Ministry office in a town, it is more difficult for business people to make contact with us, so we are coming to them.

"It is an education exercise. We want people to understand how to operate within the law to protect themselves and their customers."

The Fair Trading Act is enforced by the Commission. It prohibits false or misleading representations and makes compulsory consumer information and product safety standards. It generally applies before a sale is made.

The Consumer Guarantees Act is administered by the Ministry and sets guarantees that goods or services must meet. It also provides remedies for failure to meet the guarantees. It generally applies after a sale is made.

Commission staff will be making particular efforts to meet managers and staff at appliance shops and car yards.

Common concerns in these areas are comparative pricing and trade-in promotions.

"If prices are compared to those charged by competitors, manufacturers' recommended retail prices or a before price, then the claimed saving must be real. Was that price ever charged for the same model in the same market? Even if it is the recommended price, does anyone actually charge that price?"

The Commission has found that at times prices have been increased during trade-in promotions. While advertising tells customers they are making a saving because a larger trade-in is being offered, the reality is that there is no saving at all because the price has been increased to make up for the trade-in.

Ministry staff will be focusing on hire purchase agreements and other credit contracts. The main concern is that all costs and conditions must be clearly spelled out to customers before they agree to the contract.

There will also be a meeting with Citizens' Advice Bureau staff, and all business people are being invited to a seminar at 6pm on June 19 at the Benvenue Hotel.

Ms Leamy will be speaking at the seminar about the Fair Trading Act and Ministry Consumer Adviser Nicola Shirlaw will speak about the Consumer Guarantees Act. There will be plenty of time for questions and informal discussion over finger food after the presentations.

There is a $15 charge for the seminar, which can be paid on the night or to the Commission's Christchurch office.

Media contacts

Christchurch: Commerce Commission Chief Investigator Stuart Wallace (03) 379 3284

Ministry of Consumer Affairs Consumer Adviser Nicola Shirlaw (03) 365 8763

Timaru: Mr Wallace and Ms Shirlaw 021 668 219

Commerce Commission Fair Trading Manager Rachel Leamy, at the seminar, or

Wellington (04) 498 0908

Commerce Commission Communications Officer Vince Cholewa

Phone work (04) 498 0920, home (04) 479 1432

Ministry of Consumer Affairs Communications Manager Vince Calcinai

Phone work (04) 474 2750, home (04) 389 1787

Background

Commerce Commission

The Commerce Commission enforces the Commerce Act and the Fair Trading Act.

The Fair Trading Act prohibits false or misleading representations and makes compulsory product safety and consumer information standards.

There are three product safety standards made compulsory by the Fair Trading Act They are for:

  • bicycles
  • fire safety of children's night clothes
  • toys for children aged up to three years (to prevent choking)

There are three consumer information standards made compulsory by the Act. They are:

  • country of origin labelling for clothing and footwear
  • fibre content of textile goods
  • care labelling of textile goods

Recent action by the Commission includes:

  • a car dealer was fined $50,000 for calling used cars new
  • a retailer and senior staff were fined a total of $28,000 for making false claims about a sale
  • a retailer was fined $25,000 for three charges of selling unsafe bicycles
  • a lawyer and his company were fined $20,000 for misleading land buyers
  • a bank was fined $16,000 for using misleading mortgage ads
  • the Court of Appeal defined when so called "free" promotions are misleading
  • The Auckland District Court ruled that in interest free promotions, the interest free price must be the same as the advertised cash price
  • the Christchurch District Court ruled that "we will pay your interest" promotions are the same as interest free promotions, so the total price paid on terms must be the same as the advertised cash price

Education

The Commission has also put considerable effort into educating business people about the Act. As well as publicity, it has held seminars, visited towns where it has no office, provided speakers for conferences and has worked in particular with nation-wide traders. It also publishes a newsletter and a wide range of free pamphlets about the Acts it enforces.

Ministry of Consumer Affairs

Consumer Advice Service

Provides advice to people with consumer problems. Advice is free. The Consumer Advice Service has offices in Auckland, Wellington and Christchurch and operates toll-free telephone numbers.

Works with business to ensure that companies comply with consumer law.

Information and education services

Provides information to consumers and to business about buying and selling goods and services eg leaflets, videos, booklets, education resources, seminars

Trade measurement

Checks that traders' weights and measures are accurate.

Enforces and administers the Weights and Measures Act 1987.

Consumer safety

Investigates reports of unsafe consumer products.

Advises the Minister of Consumer Affairs about the exercise of the Minister's powers under the Fair Trading Act.

Consumer policy

Advises the Government on laws, practices and policies that affect consumers.

Administers the Consumer Guarantees Act, Fair Trading Act, Hire Purchase Act, Unsolicited Goods and Services Act, Layby Sales Act.