A clothing importer and retailer received a $15,000 fine on Friday for contravening the consumer standards for country of origin, fibre content and care instruction labelling.

Merric Apparel was fined $10,800 in the Manukau District Court for contravening the Fair Trading Act 1986 relating to Consumer Information Standards. Merric had failed to correctly label clothing imported from China and sold through its retail outlets in the North Island.

Merric was also fined $4,000 under the Fair Trading Act, for representing to customers that they were not entitled to a refund on the clothing. Receipts provided to purchasers stated "No Refund. Exchange Only!"

Mr Shan (Eric) Yin, a director of Merric, admitted that he was aware of the requirement to affix care and country of origin labelling to clothing sold in New Zealand, although he claimed he was not aware it was compulsory, despite having lived in New Zealand for 11 years. He also stated that, although he was aware of the regulations, he was not fully conversant with them.

In his summing up, Judge Hole stated "factors such as deterrence and denunciation are fundamental" and that the Fair Trading and Consumer Guarantees Acts are there for a reason. He also stated that it is important the Fair Trading be seen to "have some teeth". His Honour said the representations as to refunds were "serious" and had the effect of "deceiving the public" as to their rights under the Consumer Guarantees Act.

"This conviction serves as a timely reminder to all traders that ignorance of the law is no excuse", said Director Fair Trading Deborah Battell. "Standards are there to provide consumers with information about the goods they are purchasing, and the onus lies fairly with the manufacturers and vendors to ensure maximum compliance."

"It also serves as a reminder about the consequences of misleading consumers about their rights. Traders must not refuse outright to provide refunds when, under certain circumstances, consumers have a right to a refund."

Background

Section 28(1) of the Fair Trading Act states that any person who supplies, or offers to supply, or advertises to supply goods and services in respect of which a consumer information standard applies, must comply with that consumer information standard. In this instance, the appropriate standards are:

  • Consumer Information Standards (Country of Origin (Clothing and Footwear) Labelling) Regulations 1992, which came into force on 1 July 1993;
  • Consumer Information Standards (Fibre Content Labelling) Regulations 2000;
  • Consumer Information Standards (Care Labelling) Regulations 2000;
  • AS/NZS 2622:1996: Textile Products - Fibre Content Labelling: and
  • AS/NZS 1957:1998: Textiles - Care Labelling.

Section 11 of the Fair Trading Act makes it an offence to mislead consumers as to the nature, characteristics, suitability for a purpose, or quantity of services.

Section 23 of the Consumer Guarantees Act sets out the circumstances under which consumers may have a right of refund or replacement of goods.