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Legal Basis – Fair Trading Act 1986

It is proposed that a Consumer Information Standard, under the Fair Trading Act, be created to require the mandatory labelling of washing machines, dishwashers, lavatory equipment, showers, tap equipment and urinal equipment. There are currently Consumer Information Standards covering the requirement to provide country of origin labelling for clothing and footwear, the need to provide fibre content labelling, the requirement to provide the consumer with information on washing instructions and how to care for items and information to be provided by the trader for the sale of second hand motor vehicles.

The Fair Trading Act 1986 ("the Act") came into force on 1 March 1987. In the Long Title it is described as "An Act to prohibit certain conduct and practices in trade, to provide for the disclosure of consumer information relating to the supply of goods and services, and to promote product safety". The Act provides the empowering legislation to issue regulations to prescribe a consumer information standard requiring disclosure of information relating to the kind, grade, quantity, origin, performance, care, composition, contents, design, construction, use, price, finish, packaging, promotion, or supply of the goods or services.

The Fair Trading Act and subordinate regulation are administered by the Ministry of Consumer Affairs and enforced by the Commerce Commission, however, individuals and corporations can also take action under the Act. Members of the public and businesses are encouraged to contact the Commission and provide information about behaviour that appears to breach the Fair Trading Act. The Commission assesses information it receives in this way, along with information it gathers from its own market monitoring and surveillance activities, to determine the investigations that it carries out into unfair or misleading trading practices.

If the Commission considers that a breach of the Act may have occurred, it has a number of options open to it for resolving each investigation. The options include prosecuting the offending business where this is considered the most appropriate action. Only the courts can give an authoritative ruling as to whether a behaviour breaches the Act and award appropriate penalties.

Criminal court action may result in fines of up to $60,000 for individuals. Companies or incorporated associations may incur fines of up to $200,000. The maximum fine may be imposed for a single conviction. However, if more than one offence in respect of a contravention of the same provisions is committed at about the same time, total fines imposed cannot exceed the stated maximum. The Commission also has the right to apply to the courts for corrective advertising orders. Where it is satisfied that a business has contravened the Act, the court may order the business to:

• disclose information to the public generally, or to an affected section of the public;
• publish corrective statements.

The business has to bear the costs of this remedial action. The court may grant a number of other remedial orders, including orders that:

• a contract be altered or made void;
• money be refunded;
• goods be repaired or services supplied.

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