Consumers of telecommunications services in New Zealand have rights under consumer protection legislation. These laws aim to ensure fair dealings and adequate service quality from internet and phone providers. Telecommunications services are services supplied by telecommunications providers, such as internet, phone, and mobile services.
The Consumer Guarantees Act 1993: Guarantees for Services
The Consumer Guarantees Act 1993 (CGA) applies to services supplied in trade to a consumer [Source: Consumer Guarantees Act 1993, s 2]. A consumer is generally 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 consumption in a manufacturing or production process [Source: Consumer Guarantees Act 1993, s 2]. In trade refers to any trade, business, industry, profession, occupation, or activity carried on for the purpose of gain or profit [Source: Consumer Guarantees Act 1993, s 2].
The CGA implies certain guarantees into contracts for the supply of services. These guarantees exist regardless of what a contract might state [Source: Consumer Guarantees Act 1993, s 43].
Reasonable Care and Skill
Services must be carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28]. This means the provider must act competently, using an acceptable level of proficiency in performing the service.
Fitness for a Particular Purpose
If a consumer makes known the particular purpose for which they are acquiring the service, or the result they wish to achieve, and the provider represents they can meet that purpose or achieve that result, the service must be fit for that purpose or achieve that result [Source: Consumer Guarantees Act 1993, s 29].
Reasonable Time for Completion
Where no time for completion is fixed by agreement between the consumer and provider, the service must be completed within a reasonable time [Source: Consumer Guarantees Act 1993, s 30]. What constitutes 'reasonable' depends on the specific circumstances.
Reasonable Price
Where the price for a service is not fixed by agreement, it must be a reasonable price [Source: Consumer Guarantees Act 1993, s 32].
Remedies under the CGA
When a service fails to meet a guarantee, a consumer may have remedies [Source: Consumer Guarantees Act 1993, Part 2].
- Minor Failure: If the failure can be remedied and is not of a substantial character, the consumer must require the provider to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 31]. If the provider refuses, fails to remedy, or does not do so within a reasonable time, the consumer may either have the failure remedied by someone else and recover the reasonable costs from the provider, or cancel the agreement for the supply of the service [Source: Consumer Guarantees Act 1993, s 31].
- Major Failure: A failure is of a substantial character if, for example, the service would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure, or it is unfit for a particular purpose for which it was acquired [Source: Consumer Guarantees Act 1993, s 32]. In the case of a major failure, the consumer may cancel the agreement for the supply of the service or obtain compensation from the provider for any reduction in value of the service [Source: Consumer Guarantees Act 1993, s 32]. The consumer may also obtain damages for any loss or damage resulting from the failure, provided it was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 32(d)].
The Fair Trading Act 1986: Prohibiting Misleading Conduct
The Fair Trading Act 1986 (FTA) prohibits misleading and deceptive conduct and false representations by businesses in trade [Source: Fair Trading Act 1986, s 2].
Misleading and Deceptive Conduct
A person must not, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This can apply to advertising claims, marketing materials, and oral representations made by telecommunications providers.
False or Misleading Representations
Specific provisions prohibit false or misleading representations about goods or services [Source: Fair Trading Act 1986, s 13]. This includes representations about the nature, characteristics, suitability, quantity, or benefits of services; the price; or testimonials relating to services. For example, a provider must not falsely claim certain internet speeds are achievable in a specific area if they are not.
The Commerce Commission is responsible for enforcing the FTA. Breaches can result in fines and other penalties [Source: Fair Trading Act 1986, Part 5]. Consumers who suffer loss or damage due to a breach of the FTA may also be able to take civil action to recover damages [Source: Fair Trading Act 1986, s 43].
Steps for Dispute Resolution
Internal Complaints Process
Before escalating a complaint, consumers are generally required to raise the issue directly with their telecommunications provider [Source: Telecommunications Dispute Resolution Scheme, Terms of Reference, clause 4.2]. Providers typically have an internal complaints process designed to resolve disputes.
Telecommunications Dispute Resolution (TDR) Scheme
If a consumer's complaint cannot be resolved directly with their provider, they may be able to refer the dispute to the Telecommunications Dispute Resolution (TDR) scheme. The TDR is an independent, free service that helps resolve complaints between consumers and their telecommunications providers [Source: Telecommunications Dispute Resolution Scheme, Terms of Reference, clause 2.1]. All major telecommunications providers in New Zealand are members of the TDR scheme [Source: Telecommunications Dispute Resolution Scheme, Terms of Reference, clause 3.1]. The TDR process involves facilitation, mediation, and, if necessary, a formal investigation and decision [Source: Telecommunications Dispute Resolution Scheme, Terms of Reference, Part 5].
When to Seek Independent Legal Advice
It is recommended for individuals to seek independent legal advice from a qualified legal professional when dealing with complex consumer law issues, disputes involving significant financial amounts, or when legal interpretation beyond general information is required. Community Law Centres nationwide provide free legal assistance.