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consumer

Telemarketing rules and consumer rights

Key Takeaway

In New Zealand, telemarketing activities are governed by consumer protection laws, primarily the Fair Trading Act 1986 and the Consumer Guarantees Act 1993. These Acts ensure that telemarketers do not engage in misleading or deceptive conduct, make unsubstantiated claims, or harass consumers. Consumers have rights to accurate information and guarantees for goods and services purchased, regardless of the sales method.

Telemarketing Rules and Consumer Rights in New Zealand

Telemarketing, which involves selling goods or services over the telephone, is subject to New Zealand's comprehensive consumer protection laws. These laws aim to ensure fair conduct by businesses and provide consumers with rights regarding the quality of goods and services. The primary legislation governing these interactions includes the Fair Trading Act 1986 (FTA) and the Consumer Guarantees Act 1993 (CGA).

Obligations Under the Fair Trading Act 1986

The Fair Trading Act 1986 (FTA) prohibits misleading and deceptive conduct in trade. This applies directly to telemarketing calls, ensuring that consumers receive accurate and truthful information from telemarketers.

Prohibited Conduct for Telemarketers:

  • Misleading or Deceptive Conduct: Businesses, including telemarketers, must not engage in conduct that is misleading or deceptive, or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This means that telemarketers must present information truthfully and clearly.
  • Unsubstantiated Representations: It is illegal for a telemarketer to make a claim or representation about goods or services without having reasonable grounds to support that claim. This applies whether or not the representation is false or misleading [Source: Fair Trading Act 1986, s 12A]. For example, claiming a product will deliver certain results without evidence is prohibited.
  • False or Misleading Representations: Telemarketers must not make false or misleading representations about the goods or services they are offering. This includes representations about the nature, characteristics, suitability, quantity, price, or endorsement of goods or services [Source: Fair Trading Act 1986, ss 13, 14].
  • Unfair Practices - Harassment and Coercion: The FTA specifically prohibits businesses from using harassment or coercion in connection with the supply or possible supply of goods or services [Source: Fair Trading Act 1986, s 17]. This protects consumers from aggressive sales tactics during telemarketing calls.

Consumer Rights Under the Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides statutory guarantees to consumers for goods and services purchased for personal, domestic, or household use, regardless of how they are sold, including through telemarketing. These guarantees automatically apply, even if a telemarketer does not explicitly mention them.

Guarantees for Goods Purchased:

If goods are purchased through telemarketing, they must:

  • Be of acceptable quality, meaning they are fit for all their common purposes, acceptable in appearance and finish, free from minor defects, safe, and durable [Source: Consumer Guarantees Act 1993, s 6].
  • Be fit for any particular purpose that the consumer made known to the supplier [Source: Consumer Guarantees Act 1993, s 7].
  • Match their description [Source: Consumer Guarantees Act 1993, s 8].
  • Match any sample or demonstration model provided [Source: Consumer Guarantees Act 1993, s 9].
  • Be supplied at a reasonable price, if no price was agreed upon [Source: Consumer Guarantees Act 1993, s 10].
  • Have repairs and spare parts available for a reasonable time, unless the consumer was advised otherwise [Source: Consumer Guarantees Act 1993, s 12].
  • Comply with any express guarantees made by the supplier or manufacturer [Source: Consumer Guarantees Act 1993, s 13].

Guarantees for Services Purchased:

If services are purchased through telemarketing, they must be:

  • Carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28].
  • Fit for any particular purpose that the consumer made known to the supplier [Source: Consumer Guarantees Act 1993, s 29].
  • Completed within a reasonable time, if no time was agreed upon [Source: Consumer Guarantees Act 1993, s 30].
  • Supplied at a reasonable price, if no price was agreed upon [Source: Consumer Guarantees Act 1993, s 31].

Remedies Under the CGA:

If goods or services purchased through telemarketing fail to comply with these guarantees, consumers are entitled to remedies. The nature of the remedy depends on the severity of the failure:

  • For minor failures, the supplier can choose to repair, replace, or refund the goods or services [Source: Consumer Guarantees Act 1993, s 18(2), s 32].
  • For substantial failures, consumers have the right to reject the goods or cancel the service, and may claim damages for any loss in value or consequential loss [Source: Consumer Guarantees Act 1993, s 18(3), s 32].

Unsolicited Electronic Messages Act 2007

While not directly covering voice telemarketing calls, the Unsolicited Electronic Messages Act 2007 (UCEMA) prohibits sending commercial electronic messages (such as emails, text messages, or instant messages) without the recipient's consent [Source: Unsolicited Electronic Messages Act 2007, s 9]. This Act ensures that electronic communications are not used for unsolicited marketing unless specific consent has been given or an existing business relationship permits it. This Act includes requirements for identifying the sender and providing an unsubscribe facility [Source: Unsolicited Electronic Messages Act 2007, ss 11, 12].

When to Seek Independent Legal Advice

If an individual believes their consumer rights have been breached during a telemarketing interaction, or if they have questions about specific obligations under the Fair Trading Act or Consumer Guarantees Act, it is advisable to seek independent legal advice. The Commerce Commission enforces the Fair Trading Act, and disputes can often be resolved through agencies like the Disputes Tribunal or by contacting Community Law Centres for free legal advice and assistance.

Key Resources