It’s been a good start to the year. Both the Fair Trading Amendment Act 2013 and the Consumer Guarantees Amendment Act 2013 were passed into law just before Christmas.
These amendment Acts are major gains in consumer protection, although we will have to wait until June for most of the main provisions to kick in. One of our key “wins” has been the ban on unfair terms in consumer contracts. There’s a longer lead-in for this (March 2015) to give companies time to review and revise their contracts if necessary.
Unsubstantiated claims will now be banned and the Commerce Commission will be able to prosecute companies that make claims they can’t support. We’re obviously in favour of this but it still means the commission has to go through expensive and time-consuming court proceedings if it wants to bring a case.
The commission can issue infringement notices (rather like instant fines) but only for minor offences and not for misleading claims.
We would like to see this changed. Our article on businesses that repeatedly push the boundaries of the Fair Trading Act is a depressing commentary on the corporate culture in this country. Some of our largest and most prominent companies feature as repeat recipients of compliance letters and warnings. Unfortunately, these compliance tools don’t have any accompanying financial penalties for the companies concerned.
Infringement notices with real penalties as is the case in Australia may focus minds on observing the law more carefully.
A separate positive development is that, five years after we called for it, KiwiSaver fees must be disclosed by providers on the same basis. Returns must also be reported in a standardised way. Retirement savers can now make informed comparisons between KiwiSaver schemes – something that has been extremely difficult to do since the scheme began.
The Commission for Financial Literacy and Retirement Income has developed a useful comparison tool called “KiwiSaver fund finder” on its Sorted website.
May the good news continue.
About the author:
David Naulls is Consumer's deputy CEO and the editor of Consumer magazine.
David works closely with the research and testing team to ensure the quality of all articles published by Consumer NZ. He has previously been a research writer and contract books writer at Consumer. Before returning as Content Editor, he was a freelance writer and editor for 25 years. David has post-graduate qualifications in journalism and political philosophy.