Common problems

Quotes and estimates

A supplier must be careful when providing quotes or estimates and customers are entitled to rely on the prices given. A quote is an offer to do a job for a certain price. If a quote is accepted, the work must be done for that price, unless the parties agree to change it.

An estimate is the closest price or range of prices that can be given, based on past experience. If the final price is going to be significantly different from the estimate then the business should make this very clear to the customer. In our opinion anything more than 20% is significant.

If a business is going to charge you for giving a quote or estimate they must tell you this before agreeing to provide it.

"50% off" sales

If a shop advertises "up to 50% off everything" and you find only a few items are half price, then the advertisement is misleading.

GST extra

If GST is not included in a quote or advertised price, this must be made clear. If it isn't, you can argue that you should just pay the figure quoted. Companies which have advertised prices that do not include GST, and not made this clear, have been prosecuted and fined.

It is still common for tradespeople to exclude GST. When you first ask for a quote, check the GST status.

Price comparisons

You see an ad saying "was $199, now just $99 - save $100! But you bought one before the sale started and the price was only $129.

Price comparisons like this must be based on actual market prices. In this case, for example, the item should have been on sale for $199 for a reasonable time before reduction. Thirty days is regarded as a "reasonable time" for many goods by the Commerce Commission, which enforces the Fair Trading Act. If the earlier price was in fact $129 then the comparison was misleading and the Act may have been broken.

Debt collection fees

If you couldn't pay a bill on time and the debt collectors have been called in, you don't have to pay a debt collection fee on top of what you owe unless you were made aware of this charge before you incurred the debt.

However, if you are subsequently taken to court for continued non-payment of your debt, the court can order you to pay extra costs.

Packaging

Packaging must not be misleading or deceive you about the nature, quantity or size of the product. If packaging might be deceptive there should be a clear description of the goods on the package and a clear statement about volume or weight of product.

"Interest free" finance

The price of an "interest free" or "free credit" offer should be the same as the cash price. If there's going to be any additional cost, this must be made clear. For example, an ad may say "interest free, but credit insurance applies".

Pricing mistakes

If an item is advertised for sale at a particular price, but you get to the shop only to be told that there has been a mistake and the item is, in fact, more expensive, the trader doesn't have to sell you the item for the advertised price. They are entitled to claim if a genuine mistake was made.

The Act recognises a "reasonable mistake" which may have got through the checking system, or has perhaps been caused by the actions of a third party. However, if a particular trader is always claiming that a "genuine mistake" has been made, they may be in breach of the Act regardless of their plea.

In the past, a supermarket has been convicted and fined for charging higher prices at the checkout than were on display.

Special conditions

Telling a story in fine print at the bottom of an ad, or by way of a small notice inside a store, won't save an ad from breaking the Fair Trading Act. As a general rule, fine print can elaborate on the main selling message, but it should not be used to contradict it.

Traders are also at risk if they advertise a "price" in TV promotions, together with an 0800 telephone number, but flash extra delivery or insurance charges only briefly on the screen. This is misleading, since the product can't be bought unless you pay these charges which may have been overlooked.

Overseas mail order

The Act applies to all traders who operate in New Zealand, including organisations based overseas that advertise here.

But enforcing the Act could be difficult with a company that has no physical presence or representatives here. It can be very difficult to prosecute or get redress from rogue traders not living in New Zealand.

Delivery of Goods

If a business can't supply goods or services within a specified time or a reasonable time then they must not accept payment. What is reasonable depends on the specific circumstances. Generally what is normal practice for that industry or situation is considered to be the reasonable standard.