The Commerce Commission and Ministry of Consumer Affairs will be visiting Napier and Hastings on Monday October 12 to Wednesday October 14 to discuss the Fair Trading and Consumer Guarantees Acts and other consumer protection issues.

In addition the Commission and Ministry will be holding a seminar which all Hawke's Bay business people are invited to attend. The seminar will be on Wednesday at 6pm at Ormlie Lodge, Taradale.

The Chief Investigator from the Commission's Wellington office, Ross McPherson, said that the visit is part of a planned programme of reaching traders in areas where the Commission does not have an office. These visits are educative, not investigative. Their aim is to raise awareness and compliance with the Fair Trading Act and other consumer legislation.

"We will be talking about two of the most important laws that affect businesses every day," Mr McPherson said. "After the seminar there will be plenty of time for questions and informal discussion.

"This is an opportunity for business people to increase their knowledge of the law. It is an education exercise. We want people to understand how to operate within the law to protect themselves and their customers."

In particular on this visit the Commission will be focusing on motor vehicle, tyre and home appliance dealers, and sellers of real estate and financial services, nursery furniture and computer retailers, rental car providers, and sellers of goods covered by the three product safety standards (toys, bicycles and children's night-clothes).

These are business areas that the Commission has identified as raising specific compliance issues. The Commission has warned and accepted settlements from various Hawke's Bay businesses in these fields, and successfully prosecuted East Coast Credit in 1994.

One of the key areas of concern to the Ministry of Consumer Affairs is finance institutions encouraging people to borrow money when they are already in financial difficulty. Such loans usually come with high interest rates and stringent terms and conditions, and only make the borrowers financial situation worse.

Seminar details

Venue: Ormlie Lodge, Taradale

Date: Wednesday October 14

Time: 6-8pm (doors open 5.30pm)

Cost: $25 (inc.GST) per head includes finger food (no charge for reporters). Cheques to Commerce Commission, PO Box 2351, Wellington. Door sales will be available from 5.30pm.

Speakers: Commerce Commission Fair Trading Manager Rachel Leamy

Ministry of Consumer Affairs Legal Advisor Lesa Kalapu

Commerce Commission staff in Napier and Hastings October 12-14

Chief Investigator Ross McPherson, Investigators Merv Theobald and Graeme Wood, Enquiries Officer Leonie Boyd. Fair Trading Manager Rachel Leamy will be at the seminar only.

Ministry of Consumer Affairs staff in Napier and Hastings October 12-14

Legal Advisor Lesa Kalapu, Projects Advisor Ngapera Hoerara, Projects Advisor Efi Efaraimo, Trading Standards Officer Mary Waller, Trading Standards Officer Owen Roberts.

Media contacts

Commerce Commission

Chief Investigator Ross McPherson, cellphone 021 627 909, work (04) 498 0909,

home (04) 232 6004

Communications Officer Vincent Cholewa, phone work (04) 498 0920, home (04) 479 1432

Ministry of Consumer Affairs

Ngapera Hoerara, work (04) 474 2750, cellphone 025 230 8050

Background

Commerce Commission

The Commerce Commission exists to bring about awareness and acceptance of, and compliance with, the Commerce and Fair Trading Acts.

Fair Trading Act

The Fair Trading Act prohibits false or misleading representations, and gives the Minister of Consumer Affairs the power to make product safety and consumer information standards mandatory. It generally applies before a sale is made.

There are three product safety standards made mandatory 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 director and his four companies were fined a total of $130,000 for issuing false invoices for advertising
  • a retail chain was fined $63,000 for making false claims about recommended retail prices, free interest terms and price savings
  • a computer firm was fined $50,000 for making false claims about the memory of computers and computer components
  • a car dealer was fined $50,000 for calling used cars new
  • 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

Education

The Commission puts considerable effort into educating business people about the Fair Trading Act. As well as media publicity, it holds seminars, visits areas where it has no office, provides speakers for conferences and works in particular with nation-wide traders. It also publishes two newsletters and a wide range of free pamphlets about the Acts it enforces.

Ministry of Consumer Affairs

The Ministry of Consumer Affairs exists to work with consumers and business to promote a fair and informed marketplace.

Consumer Information Service

Provides assistance to target consumers through the Consumer Advocacy Team and works to empower target consumers by running consumer education programmes using a variety of mediums. Provides support, assistance and training to community agencies such as Citizens' Advice Bureaux, Budget Advice Services and some community Law Centres. Works with business on areas of compliance with consumer law. Develops written resources for consumers, traders, business, schools, and TOPs programmes.

NB: The Consumer Information Service targets low income, Maori and Pacific Island consumers. Businesses of particular interest to the Service are those who have a high customer base of our target consumers.

Trading Standard Service

Works to ensure that goods are safe and are exchanged on the basis of recognised, informed and accurate weight or measure. Administers and enforces the Weights and Measures Act 1987 and Regulations. Investigates short measure and product safety complaints and upholds consumers' rights rot safe products and services under the Fair Trading Act 1986. Provides policy advice to Government on weights and measures for use in trade; and about safety issues with consumer goods (with a particular focus on child products). Develops information resources for consumers and traders on weights and measures and product safety.

Recent work has involved prosecutions for short measure firewood, developing a major trader programme in trade measurement and investigations into the safety of disposable cigarette lighters, prams and strollers, and cots and portable cots.

Consumer Policy

Advises the Government on laws, practices and policies that affect consumers. Administers the Consumer Guarantees Act, Fair Trading Act, Hire Purchase Act, Layby Sales Act, Door to Door Sales Act, Unsolicited Goods and Services Act and the Credit (Repossession) Act.

Much of the work carried out by the Policy section is on a project basis. An example is a current amendment on the Fair Trading Act before Parliament seeking a change to the limitation period. The Act currently has a limitation on actions being taken within three years of the date the breach of the Act occurred. The amendment seeks to change this to three year period to run from the date the conduct is discoverable by the claimant.

The Policy division is currently working on assessing the need for a general review of consumer credit law.

Also, Policy staff work with industry having often substantial input into the development of codes of practice. For example, codes from the Direct Selling Association of New Zealand and the Electricity Suppliers Association of New Zealand have been developed in conjunction with Ministry input. The Ministry also provides advice and support to the Banking and Insurance and Savings Ombudsman schemes.

The Consumer Guarantees Act.

The Act sets guarantees that consumer goods and services must meet. Consumer goods are those normally acquired for personal, domestic or household use. It also sets out the remedies available when the guarantees are not met. The Act will generally apply after a sale is made.