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Repeat FTA offenders

A significant proportion of Fair Trading Act (FTA) offences are committed by repeat offenders, many of whom are major retailers.

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The Commerce Commission's annual report for 2011/12 shows that 26 percent of FTA offences were by companies which had offended more than once in the last three years. The report also notes that these repeat offenders were most often “major retailers – who have the resources to know better”.

This finding mirrors trends in complaints received by Consumer NZ. Our advisers regularly deal with complaints about misleading claims made by “big box” retailers.

The number of investigations into alleged FTA breaches also increased in the last year. The commission carried out 462 investigations in 2011/12 compared with 372 in 2010/11. Spending on FTA enforcement was $4.5 million, above a forecast budget of $3.2 million.

There’s also been an increase in investigations under the Credit Contracts and Consumer Finance Act (CCCFA), which regulates the consumer credit market. There were 49 enforcement cases in 2011/12, up from 39 in 2010/11. Sixteen percent of offences under the CCCFA were committed by businesses that had offended more than once in the last three years. The commission says these businesses were predominantly the major banks.

Cases investigated by the commission are likely to be just the tip of the iceberg. Many problems may never get reported to the commission, particularly when they affect consumers who don’t know their legal rights or aren’t confident about asserting them.

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