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The following information is a general
guide to the Fair Trading Act. The Commerce Commission's
publication Guide to the Fair Trading Act for Advertisers and
Traders covers the following information in greater detail. For
more information and the opportunity to order the Commission's
Fair Trading Act publications, visit their
website.
You can access the Fair Trading Act online at the
NZ
legislation website [external website].
There is no cost for browsing the laws and regulations on this
site.
The Consumer Information Standard for motor vehicle traders,
the "Supplier Information Notice (SIN)" came into
effect on 15 December 2003. This page now includes information on
the Notice, an example Notice for traders to download (PDF
version), and a series of frequently asked questions.
Please note
The
New Consumer Information Notice (CIN) is required to
be displayed from 1 July 2008.
From 1 July 2008, all motor vehicle
traders will need to complete and display
the new Consumer Information Notice (CIN)
when a used motor vehicle is offered for
sale.
The
Consumer Information Notice (CIN)
July 2008 replaces the current
Supplier
Information Notice (SIN) December 2003.
Scope of the Fair Trading Act
The Fair Trading Act applies to all people in trade. You cannot
contract out of the Fair Trading Act.
The Act prohibits people in trade from misleading or deceptive
conduct in general. You do not have to intend to mislead or
deceive, it is whether your actions did or could mislead or
deceive.
It prohibits certain types of false and misleading
representations about
- goods and services, including false claims that goods or
services are of a particular price, standard, quality, origin or
history or that they have particular uses or benefits, or that
they have any particular endorsement or approval the public in
respect of goods and services and employment
- employment
- sales of an interest in land.
Unfair trade practices
The Act also prohibits specific unfair trade practices such as:
Bait advertising
Bait advertising is advertising goods at a price which is
likely to act as a lure to customers where you do not have a
sufficient supply of those goods. A possible defence to a charge
of bait advertising is to supply a "raincheck". A raincheck
entitles the customer to future goods which are the same or
similar to the goods at the advertised price.
Offering of gifts and prizes with no intention to provide
You must not offer gifts and prizes that you have no intention
of providing. If you are running a contest or sales promotion you
must not mislead or deceive people as to the nature of a
competition or to the prizes to be won.
Pyramid selling
Pyramid selling schemes are specifically prohibited by the Fair
Trading Act.
Schemes normally have these elements:
- they offer a financial return based on the payments of new
recruits
- the return is primarily dependent on new members being
continually recruited.
Schemes also include those involving participants buying or
selling an investment opportunity or schemes that involve
participants using an agent - provided by the scheme operators -
to recruit other participants on their behalf, instead of
recruiting participants themselves.
It should not be confused with multi-level marketing schemes.
These schemes also involve the selling of a product, but a
financial return is not reliant on more people joining the scheme
but on the sale of the products.
Harassment and coercion
The Act prohibits the use of harassment, coercion or physical
violence if you are selling goods. Be aware of your sales
operation - tactics that could be considered just "hard sell" may
border on harassment to your customer.
Product safety standards
Currently there are six Product Safety Standards under the Fair
Trading Act. They relate to:
More information on the
Standards is
available in the Product Safety Section.
Consumer information standards
There are four consumer information standards at present.
The current standards are:
- country of origin labelling - for most clothing and footwear
- care labelling - for clothing and textiles
- fibre content labelling - for clothing and textiles
- "Supplier Information Notice" for motor vehicle traders.
Copies of the first three standards are available from:
Standards New Zealand
[external website]
Private Bag 2439
Wellington 6140
Email
Supplier Information Notice - motor
vehicle traders
Example notice
Frequently asked questions
The FTA also requires motor vehicle traders to comply with the
provisions of the Consumer Information Standard "supplier
information notice" regulation.
All registered motor vehicle traders must prominently display a
Supplier Information Notice (SIN) on used motor vehicles they
are selling as required by the Consumer Information Standard
regulation. You are not required to display a Supplier Information
Notice with any vehicle that does not meet the definition of “used
motor vehicle” as set out in the Motor
Vehicle Sales Act.
Car market operators
Under the MVSA, car market operators must take reasonable steps
to ensure private sellers attach the Supplier Information Notice
to a motor vehicle they are selling. Car market operators who do
not take reasonable steps to make sure private sellers display the
notice can be fined up to $2,000 under the
MVSA.
At the very least, reasonable steps would involve car market
operators informing sellers of the requirement to display the
notice, and making copies of the notice available to sellers for
their use. It would be prudent for car market operators to have
systems in place for checking whether sellers have the Supplier
Information Notice displayed.
Enforcement
The Consumer Information Standard is a regulation under the FTA
and is enforced by the Commerce Commission.
Motor vehicle traders will breach the FTA if they either fail
to display the Supplier Information Notice, or display a Supplier
Information Notice containing inaccurate or incomplete information
with vehicles for sale. This does
not apply to car market operators unless they are
also the vehicle seller. The Supplier Information Notice
must comply with the format specified in Section 7 and Schedule 1
of Regulations.
The Commerce Commission has published a
resource for traders on their enforcement of the Consumer
Information Standard Supplier Information Notice. Contact
the Commission's Contact Centre on 0800 943 600, or
email to request a
copy.
Civil claims under the Fair Trading Act may be made by
purchasers if false or misleading information is entered onto the
Supplier Information Notice.
Supplier Information Notice example
The Ministry has developed a
sample Supplier Information
Notice for motor vehicle traders to use. (PDF 37kbs)
Supplier Information Notice - Frequently
asked questions
If an auctioneer auctions a
motor vehicle on behalf of a motor vehicle trader, whose name
should be listed as the supplier on the SIN?
The auctioneer is the supplier and should be listed as such on
the SIN. Remember, however, that the motor vehicle trader may have
obligations under the Sale of Goods Act and the Fair Trading Act.
If a motor vehicle trader
sells a vehicle on behalf of a vehicle’s owner, whose name should
appear on the SIN?
The motor vehicle trader should be listed as the supplier on
the SIN.
What if the motor vehicle trader
doesn’t know the year of manufacture of the vehicle?
The "vehicle year", as it appears on the LTNZ Motor Vehicle
Register, must be written on the SIN. Vehicle year can be either
the calendar year in which the vehicle was manufactured or the
model year as designated by the manufacturer. This data is
available from the Motor Vehicle Register.
Visit
Motochek for
more information.
How do you fill in the plate
number if the vehicle has personalised plates?
A personalised plate is still the "plate number or
distinguishing mark" at time of sale that must be written on the
SIN. Upon sale of the vehicle, if the personalised plate is
changed, this is done through the LTNZ and the new plate number is
recorded on the LTNZ's Motor Vehicle Register.
Visit
Motochek for
more information.
"Imported as damaged" -
availability of information from LTNZ
An imported damaged flag is recorded on the Motor Vehicle
Register only in the case of "obvious structural damage or
deterioration" of a vehicle. The key word is "structural", as this
determines whether the flag remains on the vehicle record or not.
Vehicles with visible damage that is not necessarily structural -
such as a minor dent to a door panel - may be flagged initially
but the flag will be removed following subsequent inspection by an
approved LTNZ certifier. No information on the damage will be
retained on the record and, therefore, will not be disclosed on
the SIN.
When a vehicle is imported and damage is recorded at the
Bordercheck inspection, an "imported damaged flag is set to "Yes".
This information will be held against the vehicle record once the
vehicle is registered on the Motor Vehicle Register.
The imported as damaged information is available on
Motochek. It will display
this information within the vehicle details section:
- Result record shows "imported damaged flag" = Yes, then this
information must be entered into the SIN.
When Motochek does NOT display this detail, then No should be
entered on the SIN against Imported as damaged.
To ensure you comply with the SIN requirements, enter either
Yes or No based on what is reported on
Motochek.
If a vehicle is not initially imported as damaged but
at certification time by the
LTNZ, the vehicle is assessed as
damaged – does the SIN have to include "imported as damaged"?
Yes – the SIN should state whatever is listed on
Motochek. "Imported as
damaged" means the LTNZ recorded that the vehicle had obvious
structural damage or deterioration at time of import. See
above for more information from the LTNZ about Imported Damaged
flag.
If a vehicle is imported as damaged, must all
subsequent sales by a motor vehicle trader state on the SIN that
the vehicle was imported as damaged?
Yes, because the LTNZ has recorded this status on the Motor
Vehicle Register. See above for more information from the LTNZ
about Imported Damaged flag.
What should I write on the SIN if the vehicle is
unregistered and the information is not on the Motor Vehicle
Register?
As certain data required to complete parts of the SIN is
unavailable for unregistered vehicles displayed for sale (data is
only recorded on the Motor Vehicle Register once the vehicle is
registered) then this information should be left blank. To
indicate otherwise (eg that data not available) may be a breach of
the Fair Trading Act.
To prove a vehicle is unregistered, a query on Motocheck will
return the message "Vehicle never registered". This information
can be printed out and provided to the customer as supporting
evidence from the Motor Vehicle Register.
Once the vehicle is registered before sale, the SIN must be
updated to include all information that becomes available from the
Motor Vehicle Register.
We recommend that motor vehicles offered or displayed for sale
be registered.
An "unregistered" is a vehicle that has never been registered
on the Motor Vehicle Register. This term should not be
confused with "de-registered". That is, as a result of
registration cancellation or automatic de-registration where
licence fees remain unpaid after 12 months. In these cases,
full information is available on the Motor Vehicle Register.
What if the motor vehicle trader is unable to explain
the extent of the damage (or has no knowledge of the damage)?
If a vehicle is recorded on the Motor Vehicle Register as
"imported damaged", a motor vehicle trader should explain
that the vehicle had obvious structural damage or deterioration at
time of import. Apart from that, a motor vehicle trader is not
required to have specific knowledge of the vehicle damage at time
of import.
Why aren't New Zealand damaged vehicles flagged on the
SIN like imported damaged used motor vehicles?
Reliable information on damaged imported vehicles is readily
available, unlike information on New Zealand damaged vehicles.
Can I put
“unknown” in damaged import section of the SIN if I know it was
imported but don’t know if damaged ?
You must write into the SIN whatever is listed in Motochek. If
the vehicle is not flagged as damaged, leave this space blank.
The used vehicles I sell are
only offered or displayed to other registered traders. Do I still
have to put a SIN on each vehicle?
No. There is an exemption from the requirement to display the
SIN where a trader offers or displays vehicles for sale
exclusively (that is, only) to other registered traders. The
traders must be registered for the exemption to apply. The
exemption will not apply if other non-trade customers can view the
vehicles.
I am a
motor vehicle trader and the finance company has a security
interest registered over all my inventory, including the vehicles
I have for sale to consumers (this is sometimes known as an
"inventory" or "floor plan" security). Do I have to disclose this
type of security on the SIN?
No, you do not need to disclose this type of security because a
consumer is not affected by this type of security. The Consumer
Information Standards (Used Motor Vehicles) Regulations 2003 is
intended to capture security interests affected by section 58 of
the Personal Property Securities Act 1999. It is not intended to
capture inventory securities. Under section 53 of the Personal
Property Securities Act generally any security interest between a
financier and supplier over the supplier's own inventory does not
survive an ordinary sale of any item from that inventory to a
consumer.
The vehicle has a
registered security interest on it but the amount owing will be
paid off as soon as the vehicle is sold to another purchaser. Do I
have to say there is a security interest ?
Yes. You must write "There is a security interest registered
over this vehicle" on the SIN. If it is your practice/intention to
clear the interest on the vehicle when it is sold, you should
record this as a term of the sale agreement/contract.
The information on the SIN
must be kept up-to-date. Does this mean I have to update the
odometer reading disclosed on the SIN as soon as a vehicle is
taken for a test drive?
No. The information has to be updated as soon as reasonably
practicable after the information has changed. Updating it after
every few test drives is reasonable.
I am a
trader who imports vehicles for customers. The vehicle details are
not on the LTSA register until the vehicle gets to New Zealand.
How should I fill in the SIN ?
You only need to display a SIN where the used vehicle is
offered or displayed for sale in New Zealand and you are a trader
carrying on business in New Zealand. It may also be relevant
whether the sale contract is completed in New Zealand or overseas.
For instance, if the customer has the right to examine the vehicle
in New Zealand and refuse to complete the sale and purchase, then
there is clearly an offer or display for sale in New Zealand and
the SIN should be displayed. You should seek legal advice on
whether the regulations apply to your situation.
Why is
there no requirement to list the number of previous owners on the
SIN ?
It is recognised that consumers generally value this
information. However, the number of previous owners is not
available for used imported vehicles before they are exported to
NZ. For “New Zealand new” vehicles, the information on the Motor
Vehicle Register is inaccurate due to inconsistent recording of
“trade” owners. However, sellers can still voluntarily provide
this information in some other way if they wish.
Administering the Fair Trading Act - role of the Ministry
The Ministry administers the Fair Trading Act. This means that
we have the responsibility to report to Government on the need for
changes to the current law and other policy matters. The Minister
also has the power to order compulsory recall of goods which fail
to meet a product safety standard or which may cause injury.
Enforcing the Fair Trading Act
The
Commerce Commission
[external website] enforces the Commerce Act and Fair Trading
Act. They are also charged with the role of providing information
on both Acts.
Individuals who breach the Act can be fined up to $60,000 and
corporations up to $200,000 for breaching the Fair Trading Act.
In the case of pyramid selling schemes, the maximum fine for
both individuals and corporations is $200,000. There is also an
extra penalty based on the amount gained commercially from their
involvement in the scheme.
Taking your own civil action
The Commission does not take civil actions on behalf of the
public. The Commission is interested in Fair Trading issues, but
only investigates those that meet set criteria. Consumers or
traders seeking compensation for a breach of the Act can take a
civil action through the
Disputes Tribunal or the District Court.
Commerce Commission publications on
the Fair Trading Act
The Commission publishes a range of printed information on the
Fair Trading Act including general information as well as covering
specific topics such as pyramid selling, debt collection and the
various standards. Visit their
website to order any Commission publications.
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