1. The Fair Trading Act exists to promote fair competition and in this way it contributes to the economic wellbeing of all New Zealanders. It prohibits certain conduct in trade, provides for the disclosure of consumer information relating to the supply of goods and services and promotes product safety. Protects consumers from being mislead or being treated unfairly by traders or shops. It also sets out when information about certain products must be disclosed to consumers and helps ensure products are safe.
2. It applies to all aspects of the promotion and sale of goods and services – from advertising and pricing to sales techniques and financing. Businesses cannot contract out of their obligations under the Act. Does not cover private sales. It does cover claims about products and services.
3. The Commerce Commission is responsible for enforcing the Act, but anyone – consumers and businesses alike – can rely on and take their own legal action under the Act. The Commission is also empowered to take enforcement action and will do so when allegations are sufficiently serious to meet its enforcement criteria.
4. The acts primary focus is anyone in trade from a bank, hotel or department store through to the local plumber or corner dairy.
5. In the case of Delish Cupcakes, they must not mislead their customers, for example they must not have a Razzle Dazzle cupcake on their menu if they do not have one
6. In the case where the courts find either an individual or company in breach of the pyramid selling provisions of the Fair Trading Act, the maximum penalty of $200,000 applies, with the court also able to order payment of the equivalent revenue or ‘commercial gain’ earned from the offending.
7. Businesses need to make sure all representations they make online are accurate and do not mislead consumers. Businesses selling goods or services online must also meet their obligations under the Consumers Guarantees acts. Need to include all the costs. Eg: delivery fee.
8. Prices on the menu must have a corkage fee. Must indicate extra charges for credit card. All additional charges must be on the menu.
9. Delish Cupcakes can make claims about quality. If they have a competition, they must make sure they give away the prizes.
Courtney from Study Moose
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