Under the Fair Trading Act, businesses in New Zealand can’t mislead you with false information in advertising or about pricing.
Under the Fair Trading Act (FTA), you have the right to clear and accurate prices for products and services, and factual advertising.
It is illegal for a business to mislead or deceive you about the things they sell. This includes:
A trader or retailer doesn't have to advertise or display their prices.
Incorrect pricing is when an advertised price is different from the actual price the seller intends to charge you for the product. A product could be advertised or displayed at a higher or lower price than its actual price. The retailer can’t charge more than the displayed price. Any price misrepresentation is likely a breach of the Fair Trading Act.
If you have been undercharged, the trader can’t ask you to pay the extra amount after the sale is completed unless you knew:
Advertised prices must be genuine, and there must not be extra costs you weren't told about.
Where there is an extra cost to the seller for providing a payment method, there might be an extra cost to you for using that method. If businesses do apply a surcharge, it must be clearly displayed, for example, by adding information to their online shopping cart or placing a sign close to the terminal.
Businesses and traders aren’t allowed to behave in a way that is misleading or false. They also can’t make misleading or false statements about their products' or services':
Misleading or false statements can be made:
Examples of how an advertisement could be misleading include:
Businesses must be accurate when they describe in advertising whether goods are ‘as new’, second-hand or reconditioned.
Businesses and traders can't make claims without reasonable grounds — like evidence to back them up — otherwise it is called an unsubstantiated representation. They're breaching the Act if they make a claim they can't back up with evidence, even if it later turns out to be true.
Businesses making environmental claims about sustainability, recycling, carbon neutrality, energy efficiency, or use of natural products must make sure those claims are accurate and based on solid scientific evidence.
This rule doesn't apply if a reasonable person would know the claim was just exaggeration. This is known as puffery.
Misleading pricing is when a product is promoted in an unclear way, that may cause you to be misled about the true cost of the product. Any representations about price must be clear, accurate and unambiguous.
The retailer must be able to justify price comparisons and statements about scarcity, discounts, and sale prices when they are questioned. They must also clearly state any limitations or qualifications to a special offer, such as if there are limits on the number of items per customer or limited stock is available.
Most retailers that use computerised check-out and barcoding systems are members of GS1 New Zealand. Their code of practice states that:
A trader or retailer who is not a member of GS1 New Zealand doesn't have to advertise or display their prices.
Usually, if a price is advertised or displayed incorrectly at a substantially lower price, the trader doesn’t have to sell at that price. But if they often advertise products at the wrong price or for a long time, they may be breaking the Fair Trading Act by misleading you about the true price.
If you have been undercharged, the trader can’t ask you to pay the extra amount after the sale is completed unless you knew:
Advertised prices must be genuine, and there must not be extra costs you weren't told about.
Retailers often discount products and services and advertise the savings you can make by buying at the discounted price compared to the non-sale price. This may be misleading and breach the FTA if the claimed usual price:
If the discounted price is used a lot, it becomes the usual selling price. It would then be misleading for a business to continue to claim it was discounting this price.
Businesses may also mislead you about prices if they:
Ahmed is thrilled to see an online advertisement for smart TVs for only $50 from his local appliance store. He rushes in to buy one and finds out the actual price is $500. The owner apologises for the mistake in the advertising and has it corrected immediately. This is a genuine mistake, so Ahmed will have to pay the full price if he wants the TV. But if the store did this regularly, it could be misleading conduct and Ahmed could report it to the Commerce Commission.
Contact the seller to try to resolve any dispute about pricing or advertising first. This applies to private sellers as well as businesses.
What you can ask for depends on what's gone wrong. Sometimes it will be a partial refund.
You can cancel a sale or contract and ask for a full refund if:
You could ask for compensation if misleading information resulted in loss or damage, including if you:
We have information on solving problems with specific products and services, for example, cars, phone and broadband, electricity and gas, in our Help by product and services section.
While businesses are free to set their own prices and increasing prices above levels charged previously isn’t illegal in New Zealand, the Fair Trading Act prohibits misleading and deceptive conduct and false representations.
This means that if a business gives a reason for a price increase it must be true or the business risks breaching the law. Consumers should ask for the reason a price has increased and if they believe the reason that is given is not true, they should make a complaint to the Commerce Commission.
If you can’t resolve your issue directly with the business, the Disputes Tribunal or District Court may be your next step. Bear in mind, if the seller is overseas, it may be harder to enforce any formal decision.
You can report the business to the Commerce Commission if:
Commerce Commission can't investigate every complaint or solve your individual problem. But they can warn or prosecute the business. Your information helps them assess which consumer issues are causing the greatest harm.
Get support at any point from:
Ahmed is thrilled to see an online advertisement for smart TVs for only $50 from his local appliance store. He rushes in to buy one and finds out the actual price is $500. The owner apologises for the mistake in the advertising and has it corrected immediately. This is a genuine mistake, so Ahmed will have to pay the full price if he wants the TV. But if the store did this regularly, it could be misleading conduct and Ahmed could report it to the Commerce Commission.
Hannah decides to buy a car from a private seller on Trade Me. The car is described as in good condition for $2,500 or nearest offer, with a current WOF. Hannah buys it without doing a mechanical inspection and three months later the car breaks down. Her mechanic says the engine needs extensive repairs costing $1,500. Hannah is unhappy with the sale and contacts the seller. He refuses to negotiate, so she makes a claim to the Disputes Tribunal for misleading advertising — and breach of the implied warranty as to matching its description — under the Contract and Commercial Law Act.
