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How to report a business to the Commerce Commission

Key Takeaway

In New Zealand, consumers can report businesses to the Commerce Commission for breaches of consumer law. This includes issues under the Consumer Guarantees Act 1993, which sets standards for goods and services, and the Fair Trading Act 1986, which prohibits misleading conduct. The Commission enforces these laws but does not resolve individual disputes.

Reporting a Business to the Commerce Commission in New Zealand

New Zealand consumer law provides protections for individuals when purchasing goods and services. Two key pieces of legislation are the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA). If a business is believed to have breached these laws, a report can be made to the Commerce Commission.

What is the Commerce Commission?

The Commerce Commission is an independent Crown entity responsible for enforcing a range of laws that promote competition and fair trading in New Zealand markets. Its role includes investigating potential breaches of the Consumer Guarantees Act 1993 and the Fair Trading Act 1986. The Commission typically takes action against systemic issues or serious breaches that affect a wide range of consumers, rather than resolving individual consumer complaints [Source: Commerce Act 1986, s 5; Fair Trading Act 1986, Part 5].

Consumer Guarantees Act 1993 (CGA)

The Consumer Guarantees Act 1993 provides a set of automatic guarantees for consumers when they buy goods or services from a business operating in trade. A consumer is defined as a person who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption, and not for resupply in trade, or for use or transformation in a manufacturing process, or in repairing or treating other goods or fixtures on land [Source: Consumer Guarantees Act 1993, s 2]. Businesses cannot contract out of these guarantees [Source: Consumer Guarantees Act 1993, s 43].

Guarantees for Goods

When a consumer purchases goods (any type of personal property, including products, vehicles, and household items) [Source: Consumer Guarantees Act 1993, s 2] from a supplier, the following guarantees apply:

  • Acceptable quality: Goods must be fit for all purposes for which goods of that type are commonly supplied, acceptable in appearance and finish, free from minor defects, safe, and durable [Source: Consumer Guarantees Act 1993, s 6].
  • Fit for a particular purpose: If the consumer makes known to the supplier a particular purpose for which the goods are being acquired, and relies on the supplier's skill or judgment, the goods must be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 8].
  • Match description: Goods must correspond with any description given by the supplier [Source: Consumer Guarantees Act 1993, s 9].
  • Match sample or demonstration model: If goods are sold by reference to a sample or demonstration model, they must correspond with the sample or model [Source: Consumer Guarantees Act 1993, s 10].
  • Reasonable price: If the price is not fixed by the contract, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 11].
  • Repairs and spare parts: Manufacturers or importers guarantee that facilities for the repair of the goods and the supply of spare parts are reasonably available for a reasonable period [Source: Consumer Guarantees Act 1993, s 12].
  • Clear title: The seller has the right to sell the goods [Source: Consumer Guarantees Act 1993, s 5].

If goods fail to meet a guarantee, a consumer is entitled to remedies, which can include repair, replacement, or refund, depending on whether the failure is minor or substantial [Source: Consumer Guarantees Act 1993, s 18].

Guarantees for Services

When a consumer purchases services (any rights, benefits, privileges, or facilities provided or granted by one person to another) [Source: Consumer Guarantees Act 1993, s 2] from a supplier, the following guarantees apply:

  • Reasonable care and skill: Services must be carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28].
  • Fit for particular purpose: If the consumer makes known to the supplier a particular purpose for which the services are required, and relies on the supplier's skill or judgment, the services must be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 29].
  • Completed within a reasonable time: Services must be completed within a reasonable time, if no timeframe is agreed upon [Source: Consumer Guarantees Act 1993, s 30].
  • Reasonable price: If the price is not fixed by the contract, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 31].

If services fail to meet a guarantee, a consumer is entitled to remedies, which can include having the failure remedied or obtaining compensation, depending on the nature of the failure [Source: Consumer Guarantees Act 1993, s 32].

Fair Trading Act 1986 (FTA)

The Fair Trading Act 1986 prohibits misleading and deceptive conduct and false representations by businesses in trade. Trade means any trade, business, industry, profession, occupation, or activity of commerce or an undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land [Source: Fair Trading Act 1986, s 2]. The FTA aims to ensure fair competition and protect consumers from unfair business practices.

Key prohibitions under the FTA include:

  • Misleading and deceptive conduct: No person in trade shall engage in conduct that is misleading or deceptive or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This is a broad prohibition covering various forms of communication and actions by businesses.
  • False or misleading representations: No person in trade shall make a false or misleading representation concerning goods or services. This includes misrepresentations about the standard, quality, value, grade, composition, style, or model of goods or services, or false representations about price, place of origin, testimonials, or existence of guarantees [Source: Fair Trading Act 1986, s 13].
  • Unfair practices: The Act prohibits specific unfair practices such as bait advertising (advertising goods or services at a specified price where the business knows they will not be able to supply them at that price for a reasonable period) [Source: Fair Trading Act 1986, s 19], pyramid selling schemes [Source: Fair Trading Act 1986, s 21], and demanding payment for unsolicited goods or services [Source: Fair Trading Act 1986, s 21A].

Breaches of the FTA can result in significant penalties, including pecuniary penalties (fines) [Source: Fair Trading Act 1986, s 40], and courts can issue injunctions to stop prohibited conduct [Source: Fair Trading Act 1986, s 40A].

How to Report a Business to the Commerce Commission

If a consumer believes a business has breached the CGA or FTA, they can report it to the Commerce Commission. The process typically involves:

  1. Attempting to resolve the issue with the business: Consumers are generally encouraged to try to resolve their dispute directly with the business first. Many issues can be resolved through direct communication.
  2. Gathering evidence: Collect all relevant information, such as receipts, contracts, advertisements, correspondence with the business, and any other evidence supporting the claim.
  3. Making a report online: The Commerce Commission provides an online complaint form on its official website. This form requires details about the business, the nature of the complaint, and supporting evidence. The Commission reviews reports to identify patterns of conduct or serious breaches that warrant investigation [Source: Commerce Commission website, 'Making a complaint'].

It is important to understand that reporting to the Commerce Commission does not guarantee an individual resolution to a consumer's specific dispute. The Commission's role is enforcement of the law for the benefit of all consumers, not individual advocacy.

When to Seek Independent Legal Advice

If a consumer requires assistance resolving an individual dispute with a business, or needs advice on their specific rights and options under the Consumer Guarantees Act 1993 or the Fair Trading Act 1986, it is recommended to seek independent legal advice. This can be obtained from a private lawyer or by contacting a Community Law Centre for free legal assistance.

Key Resources