International Comparison Discussion Paper

May 2006

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Executive Summary

The redress and enforcement provisions in New Zealand's Fair Trading Act 1986 (FTA) and the Consumer Guarantees Act 1993 (CGA) have been compared with those found in consumer protection legislation in Australia, Canada, the USA and the United Kingdom.

Overall, the FTA and the CGA contain prohibitions and redress and enforcement provisions that are very similar to those that are available in consumer protection legislation in the comparison jurisdictions.

Whilst there are no significantly different approaches in the overseas legislation, analysis has indicated that there may be some additional prohibitions, investigation and enforcement tools and penalties that may strengthen the FTA in terms of achieving the desired outcomes for consumers and businesses.

It is proposed that amendments to the FTA be considered to provide for:

• Unfair terms in consumer contracts prohibition;
• Product safety warning notices and powers of investigation;
• Cease and desist orders;
• Substantiation notices;
• Court enforceable undertakings;
• Compulsory interview powers; and
• Banning orders.

Including these prohibitions and redress and enforcement provisions in the FTA should assist the Commerce Commission to act more effectively and efficiently when it believes that a contravention has occurred.

The proposals should provide better protection for consumers and thereby allow them to transact with more confidence and should enable compliant businesses to compete fairly.

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