consumer law

Well, nice to see you. To see you. Nice. It's been a few weeks. In fact, it's been most of the semester, but I'm here for the next three lectures. So, you're going to have me uh talking about consumer law. All right. Now, you have already had an injun uh an introduction to consumer law through the uh credit contacts and consumer uh finance act. The rem remaining lectures in um this course focus on two principal uh pieces of legislation which set out consumer rights and protections and they are the Fair Trading Act or the FTA for short and the Consumer Guarantees Act which is the CGA for short and both of these acts are relatively recent in legal terms they're relatively recent okay Um but they support a trading environment um that promotes the long-term interests of consumers. All right. So that's what we're going to have a look at um today. Okie do. So um let's just have a little bit of a history lesson so to speak. Um just some context for consumer law uh in New Zealand. Um before the 1980s, um New Zealand's consumer law was quite fragmented, uh with protections mainly and mostly found in the sale of goods act 1909. Um and and and and what that that was the cornerstone basically of consumer protection. And what it did was to establish that um goods sold must be of merchantable quality, fit for their intended purpose. And all that did really um was um focus that focus on quality and fitness for uh purpose um applied more to the supplier uh consumer relationship than to any broad consumer rights. So, This was later supplemented by um specific legislation um like the Consumer Information Act uh 1978. And this uh particular act introduced uh specific protection around false and misleading uh claims regarding goods, regarding services and prices. And so that was one step forward really in um having a broader information um rights and um to for the consumer. More specific legislation or laws were enacted to address specific uh consumer issues. And what you get is the door-to-door sales act, the layby sales act and the unsolicited goods and services act. Now, the door-to-door sales act, as it says by its name, really um protected consumers from the aggressive sales techniques that were used by door-to-door sellers. Uh the layby sales act well obviously provided protection for consumers um who were using layby uh arrangements and the unsolicited uh goods and services act address situations where consumers receive goods or services that they hadn't actually requested. They just came at their door or they whatever. Okay. So, I'm I must say that as an aside um because we will talk about those um areas of consumer rights a bit later, but all those three acts have now been incorporated into the FTA into the Fair Trading Act. Uh section 21A through to 21D covers doortodoor sales and the layby sale uh sorry and the unsolicited goods and services act and um part four of the FTA covers layby sales. All right so they haven't gone away but they no longer exist as specific acts they are now being taken and dropped into the FTA. Right. Boom. Okay. So, um these pre980 consumer protection laws were very weak. Really quite weak. Um because they weren't part of a unified rightsbased system. It was very much caveat emptor. And I don't know whether you've heard the phrase before. It's Latin obviously. Um but it basically means let the buyer beware. Um so the core idea of caveat emptor is that the responsibility lies with the buyer to ensure that the goods in the property that they're um purchasing are suitable for their needs um and they're in good condition. Buyers also were expected to do their own homework i.e. due diligence um before committing to any purchase. So basically um pre980 consumers only had rights against the seller if there was fraud involved or if there was a breach of contract. All right? So there was not much around really for the consumer to protect their rights at all. But hope is on the way. Okay? Because what you get is a whole raft of um legislation coming into effect um throughout the 1980s and throughout the 1990s. Um because you saw very significant changes um and evolution towards what we would consider modern consumer law. Uh when the government decided, well, it was time to create a an environment where consumers could transact with confidence. They knew what they were buying that was good. They knew that they would have some remedies if it wasn't, etc., etc. And so it did this, the government did this by providing information and establishing market rules, uh, including setting standards and those sorts of things. Um, and providing mechanisms for enforcement if um the seller um renegadeed on the deal etc. So you also you get the commerce act first of all right 1986 um this is in enforced by the commerce commission and it prohibits anti-competitive behavior or conduct um so it's it stops uh competition um for the long-term benefit of of consu consumers. So it it it it makes sure that there is no anti- competition um rules around because the bet the consumer is the one who loses out when it comes to that. Um so for instance they had to ban uh anti-competitive agreements like price fixing okay market allocation. Um they couldn't Therefore, um the the what did I say? It's more like they were preventing an abuse of a dominant position. All right. As well, um prohibiting merges that would uh substantially lessen competition. Um the act also enabled uh economic regulation of natural monopolies and it also gave powers to the commerce commission to investigate and take action for any breaches of anti-competitive competition. Next, you get, and you've dealt with this already, the Credit Contracts and Consumer Finance Act, and you know that it governs lending and credit and ensures that consumers can make informed choices, um, know what they're agreeing to, and can keep track of their debts. The next piece of in of legislation that came in was the Fair Trading Act. That's the one we're going to talk about today. And then we get the Consumer Guarantees Act. And basically those two laws on the or acts on their own um replaced a lot of the fragmented laws of the past. And these later acts just gave a broader commun uh consumer protection system. And so consumers basically have statutory rights now. All right. Okay. So, those are the pieces of legislation that have been introduced post 1980. We're going to concentrate on the um Consumer Guarantees Act and the Fair Trading Act. Those are the two at the moment for my lectures anyway. We're going to um look at now following this lecture. That is if I've done my job right. Okay. Um you'll be a ble to apply the provisions of the FTA to uh scenarios relating to misleading and deceptive conduct to uh unsubstantiated representations, false and misleading representations and unfair practices. You'll also hopefully be able to explain the rules of enforcement that apply when those visions are breached. Right? So that's the objective of this particular um lecture. Okay. So the FTA well the FTA uh prohibits certain conduct and practices in trade and you've that's very important. FTA covers uh conduct and practices in trade. Uh so it provides for the disclosure of consumer information relating to the supply of goods and services promotes product safety. So it's concerned with what happens before another important word to remember before goods and services are supplied to the customer. So the FTA promotes trading which is fair, honest, transparent, and it protects consumers by requiring that information about goods and services is not misleading or deceptive or is not misrepresented. And it uh protects ethical traders by giving them rights against traders who are in breach of the act. So those who do the right thing are protected against those who do the wrong thing if you like. Now part one of the act prohibits three kinds of business conduct, misleading and deceptive conduct which is sections 9 through to 12. And by the way you should actually get hold of the FTA and have a look at it. Okay. You can download it from government uh the government website. All right. So I would do that and have a good look at it. So misleading and deceptive conduct sections 9 to 12. False and misleading representations which is section 13 through to section 16 and unfair practices which is section 17 through to 26. Right? So those are the three main kinds of business conduct that the Fair Trading Act deals with and we're going to have a look at those one by one. Aren't we lucky? Okay, so I told you that sections 9 through to 12 cover misleading and deceptive conduct. Section nine covers misleading and deceptive of conduct. Generally, sections 10, 11, and 12 cover specific cases or specific conduct. Section 10 in relation to goods, section 11 in relation to services, and section 12 in employment. Okay? So, it's section 9 in general is the one you'll normally go to unless you're dealing with goods, you might have a look at 10. If you're dealing with services, you'll have a look at 11. And if you're dealing with employment, uh you'll have a look at section 12. But nine also covers all of those as well. Okay. So, let's have a look at section nine, which is misleading and deceptive conduct. That is the most important section. Asterisk it, whatever. Underline it, circle it, what However, that is the most important section. Um, and it applies to all those who are in trade. Now, trade is defined in section 21 of the act and it means any trade, business, industry, profession, occupation, activity of commerce or undertaking relating to the supply or acquisition of goods and services or to the dispossession uh sorry disposition of or acquisition of any interest in land. Right? So trade covers a wide range of activities. Right? Okay. So the party in trade has to be engaged in some kind of conduct. Conduct is defined in section 22 no two subsection two and means engaging in conduct in reference to doing or refusing to do an act and it includes permitting to do an act. In other words, leaving it out doing it. Making it known that an act will or as the case may be will not be done. All right. So conduct can be continuous. You can keep doing it or it can even be a single act, a one-off, right? Only do it once or even if you just don't do anything. So conduct, whatever that conduct is, has to be misleading or deceptive or likely to mislead or deceive. And there's no definition of those words. words in the act. The act doesn't define what a misleading or deceptive means. So, who decides what those words mean?

The court. All right. The courts decide the courts decide what those words mean when it's judging a case um involved. All right. So, and when they do um decide what um those words mean, they give reference to the current business behavior. So they look at what businesses do. All right? To to to decide whether it's um misleading or deceptive. Now I've got a case down there am finance and heaven. Although I don't think the heavens thought they We're in heaven. Okay. But anyway, okay. What happened was the heavens applied to AM Finance for a loan as you do. Uh and the application was granted. So AM Finance intended to make a single advance to the heavens. Um but they had the heavens uh enter into a loan facility agreement, an LFA. or whatever. Um, and what that LFA did was provided for advances from time to time. So, um, basically they wanted a one-off agreement, but when they wrote the when they wrote it, they allowed for an LFA, which allowed for loans to be granted o, you know, on an ongoing basis if necessary. or advances. And what do you think the heavens did? Well, they applied for one of those ongoing loans or um they sought a further advance and AM declined them, claiming that they were not obliged to actually offer uh a further advance. What did the heavens do? They claimed a breach of section 9. of the FTA and in the high court they succeeded. Of course, AM wasn't satisfied with that decision. So, they appealed. So, we go up a court. Okay. And so, the court of appeal held that whether conduct is misleading or deceptive or is likely to mislead or be de uh to deceive is a question that should be approached in three parts. They asked three questions or said there's three questions you have to ask. First of all, was the conduct capable of being misleading or deceptive? Secondly, was the plaintiff, the person making the complaint, um were they in fact misled or deceived? And thirdly, was it reasonable if in all the circumstances for the plaintiff to have been misled or deceived. So when the court looks at whether there's been misleading or deceptive conduct, those are the questions that they ask. Okay. So basically what you've got is the conduct is judged objectively, i.e. from the viewpoint um of a party that's not involved in the um dispute. In other words, an an outsider looking in, right? That's what we call the reasonable person in law. Used to be called the reasonable man, but I always objected to that and said there's no such thing as a reasonable man. A reasonable woman. Yeah. No, no, no. It's now reasonable person. All right. So, very PC now. Um, but how would a reasonable p person looking at this, how would what would they think? Okay. So, it's objective, but it is also subjective because it's also from the viewpoint of the party that's involved. How would they have seen it? How would they have looked at it? Would it be deceiving or misleading to them in their position? Applying all those steps, the court held that the loan facility agreement was capable of being misleading. It was according to them a wholly unsatisfactory document uh to implement the transaction. In other words, what the court was saying is you didn't need this document. If you're only going to give them a one-off loan, that's all you needed to do. You didn't need to have this. And of course, the heavens were misled when they signed that because it looked like they could get further loans, right? Okay. So, um the court said they were capable of being misled. Uh and it was not unreasonable for them to have been misled. So those three questions. Okay. And one of the things you got to remember is it make it will make no difference at all whether a misleading or deceptive statement was made fraudulently or innocently. Did you mean to do it? Did you not mean to do it? Doesn't matter. If if it's been a misleading or deceiving um um statement, then it's misleading and deceiving. All right? It's captured. So both those um whether it's mis um fraudulent or innocent, it's captured under the section 9 of the FDA. Okay. Okay. So that's heaven. Um and a MP finance with their dispute with Okay. Okay. So, other examples of conduct of conduct that has um been found to be in breach of section 9 are claims that are ambiguous or that contain half-truth or are incorrect. Um, one of them here we'll have a look at BMW, New Zealand and Pepe Holdings. Um because the high court in that case held that um importing, advertising and selling secondhand BMWs whose odometers had been wound back. All right. Was misleading and deceptive conduct under section nine. There was also, by the way, breach of section 13. Um, we'll come to because odometers represented that vehicles had a particular history uh and and and a mileage that they in fact did not have. All right. So, it breached section 13 as well. Um, Hyber and Baroot and Thompson is another um case. This was a real estate agent um and he was found liable for misleading conduct when he advertised an Oakland property as having magnificent sea views. What he forgot to tell the clients was the yacht club just down there was going to build a huge whatever and block out their view completely. All right. Um so the high court they it was held that the agents failure to say that those views would be affected u by the club's proposal made a literal truth untrue. Okay. Yes, at the moment it had magnificent sea views, but that wasn't for going to be for very long. Soon as the clubhouse was built, Carter Halt Harvey and Cottonoft and I suppose you know what Cottonoft goods are. Yes, I would suppose well not all of you will use it but um those of you who do yes it's toilet paper. All right. Anyway, so this case concerned um toilet paper. Carter Halt Harvey successfully argued that its competitor Cottonoft engaged in misleading and deceptive conduct. How? Because it advertised its products as New Zealandmade when in fact only a small part of the manufacturing process was carried out here in New Zealand. Okay. So in this case the high court decided in fact not um not to um hold them or not to charge them or or fine them. Um they decided that um because cottonoft agreed to change its packaging that was sufficient. So, you know, when you go to the commerce commission, they don't always hand out fines. If they can change behavior, if they can change conduct, uh they're more in in inclined to do that than they are to find people. So, um Carter Hold Harvey of course was not happy uh about that and they wanted um that well they wanted that misleading uh packaging to be um to have a declaration and a fine for it. Uh but they were unsuccessful. All right. So that's all about toilet paper because it wasn't made in New Zealand. Okay. Um the next one I want to um talk about is Another misleading deceiving conduct can be the by use of a business name um a design a logo which leads the public to think that it has some association with another wellknown business. The courts have recognized as public policy that uh allowing enforcement of the act by rival traders um to ensure that um unfair procedures by uh competitors in the marketplace is curbed. For example, you've got Taylor Brothers. Now, Taylor Brothers had been in the Wellington dry cleaning uh market for over 50 years. They'd been in the garment hire market for about 40 of those 50 years. Um and was to a lesser um extent uh in the linen hire market. Now it traded under the style tailor okay dry cleaners okay and Taylor's dry cleaning but in 1987 along came Taylor G group. You can see what's going to happen, can't you? And they were a large national public company um and they acquired quite a lot of Wellington outlets um of a linen hire service. So they used um a different name. They used Fosters I think it was for their dry cleaning side of the business. But for the linen hire side of the business they used Taylor's linen hire. Now, Taylor brothers wanted an injunction. You know what an injunction is? It's a court order either stopping conduct, right? A prohibitive injunction. So, it's an order by the court that someone must stop their behavior. Or it can be a mandatory injunction, which is an order by the court for a business to do something. All right, it's mandatory. They have to do it. Um, so those injunctions actually pretty powerful because if you don't follow them, that's uh contempt of court and there's quite a big fine. All right, so injunctions are a pretty strong deterrence. Okay, so Taylor brothers wanted an injunction. Uh, they wanted to restrain Taylor group from trading in the wider Wellington area under the name tailor. Perfectly reasonable, right? Okay. Um particularly in the uh business of um linen. All right. But still the high court granted uh a permanent injunction stating that the defendants had passed off their business as that of the plaintiff. In other words, people would confuse the two. All right. And so Taylor Group was in breach of section nine. The court said that there was ample evidence that Taylor's was distinctive from Taylor Group. All right. They were um associated with textile cleaning. And if Taylor Group was permitted to use the name in Welling there would be a natural tendency for consumers, people out there, to um treat the parties as associated. In other words, they'd look at Taylor Group and they'd think, "Oh, they're Taylor Brothers, same company." Okay? So, it was the use of the name Taylor that was the the problem. Okay? The um businesses and the trade names were just too similar. according to the court. So the rule of the court seems to be that a company is not entitled to start a business in a new area using an adaptation of a registered name, a registered business, okay? Which might mislead customers into assuming that it is associated with an established company that's already been there. Okay, and enjoys um perhaps a distinct reputation in the area. However, to be successful under section 9, the public must know about the other business. All right, the original business um before it can be, you know, be misleading or deceptive by imitation. Now, that case um happened in Bond's group. Bonds group um claimed that um Cook had breached its copyright by making and selling hand knitted wool sweaters and cardigans that were too similar to theirs. The garments depicted, you know, um similar scenes such as dancing lambs and um golfing kiwis and all that sort of thing. Um although cooks designs were a little crudder and they were um certainly her colors were more muted than um Bond's group. But Bond's group uh claimed copyright not or copyright violation not only in the individual features of the garments because they had the same sort of things on the garments but also from the um the colors that were being used and the design and the materials that were being used. Bonds also claimed that the um defendant had engaged in misleading and deceptive conduct in breach of section 9 as her garments so closely resembled bonds garments. So they were saying members of the public particularly uh Japanese tourists were likely to be misled or deceived into purchasing the defendants's uh garments, believing them to be the plaintiff's garments, bonds garments. All right. The court ruled in this case that for conduct to breach section nine, uh there had to be a misrepresentation involving a real risk, a real risk that a section of the public would be misled or deceived. Potential um purchasers, whether they were Japanese tourists or not, who had never heard of Bonds, right, will not be deceived or misled. If they didn't know about Bond's uh garments, how could they be misled or deceived? All right. Um and so they wouldn't be misled or deceived to thinking that Cook's garments um had a connection with bonds. Okay. So, the court ruled that in this case there was insufficient similarity between um Cook's garments and those of Bond um for a real there to be a real risk of confusion um or um deception to arise. Also, you have to Note that um an action under section 9 may not be successful where the words complained of are in common use. From 1994 um independent newspapers here in New Zealand published a monthly magazine called New Zealand House and Garden. often known just as House and Garden. But anyway, Australian Consolidated Press, you know, the enemy living across the Tasman Sea. Okay. Australian Consolidated Press also published a monthly magazine called Your Home, which it changed to your home and garden. Independent newspapers of course wanted to prevent this change uh of name because it it alleged passing off you know taking over their um brand and so that was a breach of the FTA. Now the words house and garden and well prior to the independence use of them uh in 1994 for had acquired had a very popular meaning in New Zealand. I mean, house and garden, everybody it words that everybody used, right? Um, and the court said that while some confusion might exist between New Zealand uh house and garden and your home and garden, um, that was a consequence of just using common descriptive words. So, the court also held that an injunction may not be desirable. if all that injunction was going to do was hinder competition between the two groups. All right, two magazines. So it appears that if the words are in common use um and then only a slight variation um in the name will be sufficient to distinguish between the um another trader's product. An alternative uh um action for a wrong party is to obtain a injunction on the grounds of and I've mentioned it before passing off. Now passing off um is the unauthorized use of a trademark or other representation that misleads consumers and passing off is actually a tort. Uh tort law is all about um people suing people. All right? It's not criminal law. It's uh people um against people, you know, when somebody knocks down your fence, the neighbor's fence. Anyway, what we've got is another case here um which is the um shot over Gorge Jetboats and Marine. Now, from 1970, Shottover had oper operated a tourist jet boat service on the very highest point of the shot over river. Um, and this was somewhere between I don't know if anybody knows the shot over river but it was between Tucker Bridge uh Tucker Beach and Edith Caval uh bridge I think that area. Anyway, their boats and um their courtesy vans were um um distinctively colored and bore the inscription shot over jet. All right. Now along in 1983 comes Marine and Marine started operating a tourist jetboat service on the same waters. A little lower down but on the same waters. Um and Marine Boats and courtesy vans were painted in a different color uh and design from those of shot over but the words shot over jet was given maximum emphasis um with the word lower. It's so small that you would miss it if you were looking at it. Okay. Um so marine had previously operated um on the lower stretch of the shot over river and then they decided to you know come come higher up. Okay. Um and it had used the name lower shot over uh jet since 1977 which is still 7 years after uh shot over started in 1970. As soon as um Marines started in direct competition with shot over. Well, then shot over, of course, you know what they're going to do? They're going to, and they did, move for an injunction to restrain um Marine from using the name lower shot over uh jet. And the court said that there was a strong argument that the shot over would be entitled to protection against a competitor which sought to operate under those words. Um the addition of the word lower uh even if displayed more prominently they said was unlikely to be sufficient to avoid um confusion. Right? Because the main words that people would look at would be shot over jet. Okay. All right. Um so the court said there was a serious question here of passing off of using a competitor's name as their own. Okay. Um so the the court issued an order and said that shot over was entitled to a an injunction an interim injunction to restrain um marine from using the name lower shot over jet. Okay. I think that's pretty straightforward, isn't it? I hope it's pretty straightforward. Okay. Now, are there some examples of conduct that have not been in breach of section 9? And yes, there are. Okay. So, here are some examples. An honestly expressed though incorrect opinion. And in premium real estate, here you have a real estate agent's assessment of the value of a property. All right. He made an honest mistake. He gave the wrong figure. It was an honest mistake. Okay. Um the other example of conduct that's not in breach of section 9 is a breach of a promise which is not part of the contract. Right? And that's um arms and new Plymouth District Council. Right? So traders must not make claims about goods and services if they don't have reasonable grounds to believe that they were true at the time even if their claims later turn out to be uh true. Right? For example, a trader can't claim that a health drink will improve brain function if they currently have no evidence to support it. We've had a few cases go through uh about that. Even if later studies confirm that it is true, right? They can't claim it unless they have evidence to support it. This rule doesn't um um apply if a reasonable person uh wouldn't expect the representation to actually be proven to be true. And there's a very very um common ad. How many of you believe that if you drink Red Bull, you're going to get wings and fly? Of course you don't. All right. It's so preposterous a claim that no one believes it anyway. Okay. Well, at least I hope none of you have got wings and flown when you've red ball. But anyway, Okay. So, um another example would be um a reasonable person would not expect that a claim that a beauty product would make you irresistibly attracted to romantic partners or whatever. That's not nonsense. Okay. So, when the court's looking at whether a um trader has reasonable grounds for making a represent presentation. The court takes into account a number of factors. Um for instance, the nature of the goods and services, the nature of the representation, um you know, whether it was about quantity or quality, um any research that the trader did, uh any information that they relied on, um and the effect that that representation would have on you, the consumer. So the court looks at all those sorts of factors, okay, when deciding whether it's um misleading or deceptive conduct or not as the case may be. How are we doing? I think it's time for a break, don't you? Good. Great. Let's have a break before we go on to section 13. Right. Sorry. Yes. I have to do this. Don't listen. in the chat. That's what I don't know. Is it very That's pretty good. Hang on. Henry. Okay. Um I think we'll make a little bit um a start now in the second half. Um okay. So we're still look we're looking at section 13 false and u misleading representations. Now false and misleading representations concerning goods and services. They're all set out in section 13. So have a look. Look at section 13. Um, neither the words false or misleading, as I've said before, defined in the act. So, the courts decide what they mean. Um, and a representation may be made through spoken or written words and can also be ma uh done by through conduct or through a visual image or a sound. Okay. Um, so the maker of the statement remember or the claim has to be in trade, right? And must make the representation um in connection with the supply or possible supply of goods or services or even the promotion of the supply or use of goods and services. So it's very important to remember that the maker of the representation does not have to know that the representation was false. They don't have to know it was false. It is sufficient if the representation is in fact wrong. Okay, the test remember is it's an objective one in this case. Um would the mind of the average shopper be misled by the representations that were made? And again, we've got Carter Halt and uh cotton soft. If you read on the packet New Zealand made, what would you think the product was completely made here in New Zealand, not that most of it came from overseas? Okay. So, you're looking for how that how the uh ordinary customer um or shopper would be affected. Okay. How much

to be made in New Zealand? 100%.

Yeah. Um, you would have to be able to say somewhere that some of the product was sourced somewhere else. But if you say uh New Zealand made, you're making the claim that 100% of the product was made in New Zealand. All right? So, you have to be a little careful with wording and and what sign you put on it. Certainly, if you put 100% New Zealand made, you're in for it. If if even, you know, a fraction of it comes from overseas. But if you want to say made in New Zealand, the average shopper is going to think what? It's all made in New Zealand. All right? So, you're going to be it's going to be a misleading claim. Okay? Um, Uh Charlie's orange juice had that problem a few years ago when they said that it was made in New Zealand when in fact the oranges came from Australia. They were squeezed in New Zealand but right because they came in bulk and they were squeezed but the oranges themselves were not New Zealand oranges. So they got themselves into quite a lot of trouble. It's about oh probably about 20 25 years ago. Most of you probably weren't around then but okay but yes it happened. Okay. Um right. Okay. Um so the false or misleading representation must relate to one of the situations that are referred to in paragraphs A to J of section 13. So um make for example if you make a false or misleading representation that goods are of a particular kind. All right, a standard, a quality, um quantity, grade, composition, style. If you make a claim, all right, or or even a model. If you make that claim, then it has to it can't be misleading. It can't be deceptive. All right? Even if it had a particular history or a um a previous use. It's under section 13A. All right. And prosecutions have been successfully brought for representing rugs as handmade when they were in fact made by a machine or for stating the incorrect odometer reading in the window of a car of BMW and Pepe holding um or falsely claiming as I said before that orange juice was 100% made in New Zealand when in fact it wasn't. Okay. So all of those come under section 13A. So um you can go to um section 13 G and section 13G is make a false or misleading representation with respect to the price of any goods or services. And you've had successful prosecutions in that area in um commerce commission and ad for offering a second bike for free when in fact it was not. The case actually concerned uh Craig Adair Cycles and it was buy one mountain bike get one free campaign. Um the campaign offered a free mountain bike to consumers who purchased a particular um bicycle a ridge hopper. Uh and prior to the promotion ridge hoppers sold for somewhere between4.9949 $449 and um 599. So somewhere in that $150 price range. That was their normal price before the campaign. Um with the majority selling at $449. Um and during the promotion, the customers who wanted to take up the offer, all right, were charged $5.99. Whereas normally the bikes had sold for $449. 9. When the campaign came in, buy one get one free, the price went up to $5.99 for the Ridge Hopper. You all know who Craig Adair is, do you? An Olympic cyclist. Very u very good Olympic cyclist quite a few years back. Okay. But anyway, so the court of appeal in that case decided that the retailer had breached section 13. G. It noted that the usual lower price was the uh had been charged before the promotion. Okay. And the court found that the meaning of free in buy one get one free was that the second bike um should be provided with um without any extra consideration, any extra payment. But in fact, yeah, they were paying more for the ridge hopper. So really that bike wasn't free at all. So um being charged that higher price um the court decided um you could you couldn't say the second bike was free. Right. So that's um the commerce commission and a dare. Um under section 13J a trader can cannot make a false or misleading um representation concerning the place place of origin of the goods. In other words, where the goods come from. All right. Um so we've had some successful um prosecutions um against a retailer who stocked canned tomatoes from Spain which had the word espa which is Spanish for Spain. Okay. Espa on the top and the base of the can, but the wrapound label said product of New Zealand. We've also had successful prosecutions against a trader who sold leather jackets made in Korea which bore the labels stating Marco. Christ Church, New Zealand. So sewn in of the back of it was that label, but the goods were actually made in Korea. Okay. Um we also had another um against the manufacturer that claimed its orange juice was made in New Zealand. This is a different case. It's not Charlie's. Um when it contained concentrate from Brazil. We had another successful prosecution against a processor of toilet paper again who claimed that its products were New Zealand made manufactured in New Zealand when in fact um most of the processing had happened in Asian countries and that's the cotton. Okay. Uh we also had um another prosecution against the sports clothing manufacturer um and distrib butor who also said made in New Zealand. Um, and those labels were sewn into, believe it or not, 1,800 Commonwealth Games uniforms when in fact they were made in China. Okay? So, you cannot misrepresent the origin of the goods. Okay? Right. Um okay. Um let's have a now a look now at unfair practices. And this is section 17. All right. Um the following section that's uh well following sections actually uh 17 and 19 uh target different forms of promotional uh practices. All of them are unlawful. Right? For example, offering gifts saw prizes in connection with the sale of land. Goods and services with no intention of providing them. Bait advertising. You all heard of bait advertising? Well, you will after I've told you about it. Okay. Bait advertising offers goods and services with no intention of supplying them at the advertised per uh price for a period that is or quantities that are unreasonable in the market. How many of you have walked into a supermarket where it or or you've seen advertising uh special um get in first whatever these are on on sale and when you get there there aren't any or there so everybody is crammed in there, all right, to get them they because they don't have enough of the of the product for the number of consumers that come through. So that's bait advertising. It's like um if you think about it, it's like putting a bait on a fishing hook, you know, draw throwing out the line because it draws the customers in. That's why it's called bait advertising. Have you seen that happen? Have you experienced it? So what um consumer or at least what suppliers have to do is they have to gauge their market and they have to say how well approximately how many shoppers they have coming through their doors every week and they have to put enough of that quantity of that uh product on display for that for a reasonable period of time. All right? Otherwise they'll be caught for bait advertising. Okay. Um, another unfair practice is the use of physical force, harassment or coercion in connection with the supply of goods and services or the payment of goods and services. All right? So, you can't do that if you're in trade. You can't force someone or harass them. All right? Okay. to buy your goods or your services. Okay. Um now let's have a look at I told you about uh the unsolicited goods and services. I told you that they uh used to used to be an act um on its own but it's been thrown into the FTA. Okay. So unsolicited goods and services are both defined in the FTA Um, and they are goods and services that are supplied without prior request for them. You didn't ask for them, you didn't order them, they just arrived. All right. Um, and under the FTA, if a recipient does nothing, the goods are treated as a gift. All right? Which after 10 working days you can keep. It is the responsibility of the sender uh to collect the goods and the recipient to make the goods available for that period of 10 days. After 10 days, it's yours. All right? You can keep it. Okay? Um but if you c if anyone causes a damage to those goods within that 10 working days, uh then they will be liable for the cost. of those goods. So if something arrives on your doorstep or in your post box or whatever, you didn't ask for it, take it inside, put it away safely, wait 10 days, and then it's yours. All right? Don't damage it. All right? Okay. Otherwise, you'll be liable. Okay? So that's the unsolicited goods and services. Okay. Um right so B also the um sender is required to inform the recipient of the recipient's rights and uh obligations. So they actually have to tell you um what your uh rights and obligations are at the time that the goods are delivered. Okay. A person in trade must not assert a right to payment. They can't ask for payment um or send an invoice with unsolicited goods unless it's clear that uh they make it clear to the recipient that they don't have to pay. So they can send an invoice but they must make it clear on that invoice you do not have to pay. Okay. Um with regard to unsolicited services, the recipient is not in in at all liable to pay for any those services. They didn't ask for them. They don't have to pay for them. All right. Don't have to pay for them. Um, okay. Um, that's pretty straightforward, I think. Um, layby sales. Okay. This is covered in section 4A, subp part one of the FTA. Uh, and this covers the situation where a consumer purchases goods uh from retailers and pays for them in installments. In other words, they don't pay for them right off the bat. They pay um in a part payments over a period of time. Okay? And the retailers retain possession of the goods until full payment is made. So the retailer keeps the product, you pay, and once you finish paying it off, you get it. Okay. Um, and there's no interest charged on the installments. Section 36B, uh, offers a a definition of layby sales agreement. And that's it there. Okay. Um, the act doesn't usually apply if you are um buying a product that exceeds 15,000K or $15,000. Okay. Um, so it's usually for lower priced things. Okay. Most of this is self-explanatory. The um supplier must ensure that the agreement any layby sales agreement is in writing and contains certain information. A clear description of the goods uh summary of the consumer's right cancel um the the total price that's payable uh under the agreement and a copy of that agreement has to be presented to the consumer. They have to have a copy of it and the consumer is entitled to ask the supplier free of charge what they've paid, how much they've paid, right? And how much they still owe. And the supplier must comply with within five working days of a written request that's been received by them. I don't think a lot of people use layby sales these days, but some people still do. And so I suppose, you know, this is protection for those who uh use this type of service when buying goods. Okay. It also um there are some rights that the consumer has to cancel the agreement. Um And the uh supplier can only cancel a layby agreement if they've if there's been a breach of a material term. Um for instance um the consumer hasn't paid uh one of the payments or two of the payments or whatever. Okay. And and other things. Right. Okay. So um those that just um tells you what the um rights of cancellation are. Um, I don't think I need to go through that in any great detail. I think it's fairly self-explanatory. Would you agree or not? Because I can go through it if you don't understand it. I think it's pretty straightforward. So, that's all that covers uh layby sales. Um, and also What happens if the company that's providing the um goods goes into liquidation, goes into bankruptcy, goes into voluntary administration. Have you covered that? No. No, you probably do. Oh, no, you probably wouldn't in uh you'd probably that'll be in company law rather than consumer law. Okay. Um but yes, if um cancellation um falls under that that um those uh headings. Well, then a consumer on an unfinished layby is entitled to complete it and is entitled to get the goods to obtain the goods to get both title and possession. So, the goods have to be handed over. Okay. Again, I don't think I need to go through that in any great detail. I think it's pretty straightforward besides Okay. Um now um we'll look at uninvited direct sales which is doortodoor basically. Um so this part of the FTA uh applies to goods and so services that are sold at the consumer's home or the workplace um or even through a telephone call to a consumer. Um But it doesn't apply if the price is $100 or less. So, if you're going to buy a product from doortodoor uh sales or by phone or whatever, it's got to be more than $100 for these sections to kick in. Okay. Um Oh, and the act doesn't apply if um the consumer has invited the supplier into their home. All right. So, this has got to be uninvited direct sale. So, if you invite them in, it's no longer uninvited. Right. Okay. Um, again, if uh the uh supplier must provide the consumer with a copy of the agreement. So, if there's a if there's a contract between them, if there's an agreement between them, the consumer must be given a copy of that, right? It must be in writing. Um, it must contain certain information. For instance, what the goods or services are, summary of the right to cancel, um, and what the price that they're going to pay, what what that price is. All right. Um, so those sorts of things. Um, okay. Again, pretty straightforward. Um, a consumer can cancel an uninvited direct sale by giving notice and that notice can be oral or written. So you can cancel by word and you can cancel by writing. Okay. Um and you can do this within five days within five days of receiving a copy of the agreement. So you can basically change your mind. It's what they call a cooling off. period. All right. So if you buy something and then you think, "Oh, I shouldn't have done that." All right. Within five working days, you can actually cancel the agreement. Okay.

That's the main protection.

Is what?

If you've used it, um, so long as you haven't damaged it. not a problem because it's usually used anyway because when you come into when when those sorts of products they are demonstrated and so they've already been used um I mean you know but yeah if if they've been damaged in any way well let's say you used it and you really decided that it isn't for you all right you can cancel it within five working days but if you've damaged it you will have a problem. Yeah. Okay. But anyway, that um the those five working days to cancel is the consumer's main protection against uninvited uh sales. Okay. Okay. But again, there it is. I won't go into any more detail than that really. Um, I don't even think I need to do that. I think that's fairly straightforward, unless anybody's got any comments. But what I do want to talk about is extended warranties. How many of you have paid for an extended warranty? on a TV or a CD player or a computer or whatever or a car even. All right. Okay. An extended warranty agreement is you you enter into that um by well the the consumer the warrant um and it it gives you specific guarantees um for goods and services. um that are purchased by the consumer, you the consumer. Um but it's an additional cost. You pay for that extended warranty um for those goods and services. And again, the warranter must give a copy of that written extended warranty. Now, if you are a consumer under this Consumer Guarantees Act, which is what we'll talk about next week, the law protects you anyway. So why buy them? It's a waste of money. All right? Because under the Consumer Guarantees, if you are a consumer, all right, you fit the definition of a consumer, you don't have to pay for those because the Consumer Guarantees Act says that even if a product has, say, a year's warranty, um the product should um be fit for the purpose that that it was designed for, made for, and if it doesn't last for a reasonable length of time, uh you should be able to get a refund or um another product the same uh design. So, just be careful about getting um extended warranties. Okay. Um but anyway, you must get a summary of the guarantee of the consumer guarantees act guarantees and that should be on the front page. You should get a summarized comparison between the relevant um consumer guarantees um act guarantees and the protection that you get under the extended warranty. Um you should get a summary of your rights um to cancel. You should get all the terms and conditions including the uh terms of the agreement, the expiry date, etc. You should know when that warranty does run out and the total price that you've agreed to pay uh under the agreement. But you know, so so there is under law some protection against um traders um giving you or suppliers um selling these extended warranties. Okay. Um you also have um some um additional um notice or advice really. But the warranter must where reasonably practable give the u consumer oral notice. So the consu the consumer must um be told by the supplier um what the whether they've got a right to cancel this warranty. Um and they again have five working days to do so. So, if you think you've been forced into buying a warranty that you don't need, you can within 5 days cancel that warranty. Okay? So, those are the other sections that cover. All right? And I don't think I'll go through those either because I think they're fairly straightforward unless someone wants to disagree. Okay. Now, contracting out Can businesses opt out? Can they opt out of the FTA? Simple answer, no, they can't. All right, for and we've got a case Smith and Bailey's Real Estate. And in that case, and there's the quote, um that the requirements of the act are mandatory. In enacting legislation, Parliament sought to protect the consumer from unfair trading, and it would be consistent with that objective to motiv to permit a person engaged in trade to exempt him or herself from liability under the act. In effect, this would be to allow such persons to opt out of the uh operation of the act and the regime uh decreeing fair trading in the public interest. Okay. So this case is also useful because the principal issue um in Bailey's um was where one of the senior employees uh Miss Kelland was um her behavior was misleading or deceptive or liable to be misleading or deceptive in section under section 9. So Bailey's could not opt out of the FTA. They were covered. Their behavior was covered. Okay. Now while I said that um traders cannot contract out of the FTA in some business to business which is different not business to consumer but businessto business uh transactions contracting out is possible um if the agreement to contract out is in writing and if both parties uh um are in trade um and the goods and services are both supplied and acquired in trade. Right? So if you've got two trading partners, right, who are um buying and selling goods or services or supply, then they can contract out. That's the exception. And but but um attached to that is whether it's fair and reasonable to do so. Okay. Okay. Now, um enforcement. The Commerce Commission not only enforces the act by undertaking criminal and civil actions, but under section six, it also promotes the aim of the act. That's why it doesn't always uh prosecute, right? Sometimes it just wants a change of behavior uh or conduct by a firm, but the commission um has to give information for guidance for consumers and business people. And uh that's where you can if you want to have a look at the commission's website, there's it's um com. It's known as comcom. Okay. Now, a crime will result If um where whenever there is a breach of any part of the act all right but not for a breach of section 9 14 23 or 24 actions are generally bought by the commission uh and must be commenced within 3 years. So they've got three years to build their case before they take it um to court. So three years after the breach is discovered. Okay. Now a few um years ago, the Commerce Commission obtained the first unfair contract term declarations under the unfair contract uh term provisions of the FDA against home direct and good guys. You know who they are? Mobile clothing. All right, they went or products and so forth. Okay, so They were um mobile traders and they both sold goods on credit by way of a credit facility um that provided for regular weekly or fortnightly um debits from consumers bank accounts um which included interest and also a monthly management fee. And the Commerce Commission also found that the terms in those um customer contracts um requiring that the consumer um what did they have to do? They had to sign multiple direct debit authorities and they had to provide ongoing direct debiting of the customers uh accounts even after the customer had finished paying for the products. So the customers were building up credit with good guys. Okay. Um and they said that was unfair when the co when the contract was finished um the uh customer shouldn't keep on paying and besides that when when they did build up because I know I had to fight this for one person um they had I think paid about $1,000 extra they'd finished paying for the goods but they continued to have their account debited and it built up to $1,000 and they couldn't get that money back. Because what good guys said was, "Buy some stuff from us. We won't give you the money, but you can take goods." And the customer said, "I don't want goods. I want my money." Well, that's exactly what um the Commerce Commission said. Okay. Um yeah, so Home Direct um had that voucher system as I've said before. Okay. Okay. Um what are some civil remedies that are available? Well, injunctions. Okay. Um so if there's a breach of any of the sections of the FTA, um that gives rise to civil remedies and the main remedy under section 41 is an injunction. And it's usually to stop someone on doing something. All right. Okay. Um under section 42, which is the next section, um they can have um orders to disclose information and to correct advertising. So if they've made a misleading statement in their advertising, they can be ordered to correct that statement. Okay. Um so there you go. Are there any other orders. Yes, under section 43, um the court has the discretion to make a variety of orders um that can include damages. And damages, by the way, is money paid in compensation. That's under section 43 or variation of a contract. Uh or they can ask for refunds. Right now, if you think the the Commerce Commission does not have teeth, This is Tuesday the 2nd of September. Jet Star was fined $2.25 million by the Commerce Commission for breaching the the Fair Trading Act. So, it does have teeth, right? They were misleading and deceiving customers um whose flights had been cancelled and they couldn't get their money back. Okay, so they were fined $2.5 million. Another thing that's come to notice recently is supermarkets charging the wrong or putting the wrong price on the shelves and charging the wrong price at the till. So in in actual fact, customers are overpaying for the goods. or they're saying that goods are on sale, they're on a sale price when they're actually not. Now, instead of um they haven't fined the supermarkets, but what they've said is get your act together and you have until a certain date to get um your pricing um software correct. Okay? So, that's the sort of thing that the Commerce Commission does. Okay. under the FTA. Right. Um what I've done also is here's a um a a a summary basically of the FTA. Three main problems in trade. Misleading or deceptive conduct, unfair practices, false representation. And those are the sections that cover it. Misleading deceptive conduct, sections 9 to 12. 12 section um 13- 16 covers unfair pro uh practices and section 17 to 26 false representation. All right. And remember that the FTA covers uh consumer issues before the consumer buys. Before the consumer buys. And those are the three most common problem. problems. Okay, the three main problems. Now, you have a tutorial up on Moodle and it's on the FDA and those are the areas that are covered under the tutorial. So, have a good look at it. Okay. Um All right. Um in fact, I think I've Yes, I've given you a slide there. Okay. So have a go and I've actually given you problem questions. All right. So um I've I've asked you to consider what's happened to this consumer and how does the FTA cover what's happened. All right. So I want you to be quite specific in your answer. And I've given you um also a template basically what's the problem? The issue. What's the law say? The FTA, how does this apply to what's happened in the situation that you got in front of you? And what's your answer? Okay, so pretty straightforward. Any questions?

Um, yeah. I un Unfortunately, I wear hearing aids, so it's very difficult to hear you from up there.

What the warranties?

Warranties. 

So, you said that you don't need to buy extended warranties. So, when people retail goods and it says you're covered only for one year or two years.

Oh, yes. Okay. But a product has a well, it depends on the product, but any product with its salt and gold sold um should last for a reasonable length of time and that means that for instance washing machines shouldn't conk out after one year. Fridges shouldn't conk out after one year. All right. So basically um a a a washing machine or a fridge should last for many years and if it cons out then uh you should be able to get it repaired, get a refund or get another one.

But what if they say that it was only one year?

Well, that's an insufficient time to guarantee a product.

So, you can just go to them and say,

"No, because the Consumer Guarantees Act for a start, although I'm talking about the FDA, but the Consumer Guarantees Act, for instance, says that a product should last for a reasonable amount of time. And if you're buying something like a washing machine or a fridge, they should last for five, six, seven, eight years before there's even any problems with them. They should, but it also depends on how much you paid for it. If you pay for an inferior product, then the inferior product might break down. Okay. Um I remember um uh because on on the other side of my family uh they have seven kids. All right. All was crammed within uh 8 years of each other basically. And when you went shopping for them, they said always buy the inferior goods. All right? Because they just break them anyway. All right? So, yeah. Um but if you're buying goods of a reasonable quality, you pay a reasonable price for them, they should last for a reasonable time. If you're buying inferior goods that are very badly made, don't cost a lot, then expect them to break. fairly quickly. All right. So, if you buy fridges, free, you know, those sorts of things, they should last for a reasonable length of time. And the warranties that are given by the companies are are really not don't cover the amount of time that they should cover. That's why you get those extended warranties. You don't need them, but but be careful. Sometimes, you know, you might, but on. I never buy an extended warranty and I've never had a problem. Well, as I have, but I got it back. I mean, got it repaired. Got it. Yeah. So, I won't I won't pay extended warranties cuz that product should last. Okay. More than a year. Believe me, most consumers don't know what their rights are under the Consumer Guarantees Act or even under the FTA. Okay. But remember the FTA is about um what happens before before you buy. So it's about um the way that a product's advertised, the way that a product's mis uh represented. All right? It's about what happens before a consumer buys. Whereas the Consumer Guarantees Act covers what happens after you buy. Any other questions? Then guess what? That's the door. Okay, I'll see you next week when we will talk about the Consumer Guarantees Act.

1. Introduction to Consumer Law in New Zealand

1.1 Evolution and Context

New Zealand's consumer law transformed significantly from a fragmented system predominantly governed by the Sale of Goods Act 1909, which focused on merchantable quality and fitness for purpose. This early legislation primarily addressed supplier-consumer relationships rather than broad consumer rights. The post-19801980 era ushered in a more unified, rights-based framework, including the Fair Trading Act (FTA) and the Consumer Guarantees Act (CGA), aimed at fostering consumer confidence and promoting ethical market conduct.

1.2 Caveat Emptor (Let the Buyer Beware)

Prior to the 19801980s, the legal principle of caveat emptor (Latin for "let the buyer beware") dominated. This placed the onus on the buyer to perform due diligence and ensure goods were suitable and in good condition. Consumers had limited recourse, mainly in cases of fraud or breach of contract. The modern legislative framework fundamentally shifts this burden, providing statutory protections to consumers.

1.3 Key Modern Legislation

• Commerce Act 1986: Enforced by the Commerce Commission, this Act prohibits anti-competitive behavior such as price-fixing, market allocation, abuses of dominant market positions, and anti-competitive mergers, all designed to benefit consumers through fair competition.

• Credit Contracts and Consumer Finance Act (CCCFA): Governs lending and credit, ensuring consumers make informed choices, understand agreement terms, and can manage their debts.

• Fair Trading Act (FTA) 1986: This Act is central to pre-purchase consumer protection, prohibiting misleading and deceptive conduct, false representations, and unfair practices in trade.

• Consumer Guarantees Act (CGA) 1993: Addresses consumer rights after a purchase, focusing on aspects like product quality, fitness for purpose, and durability.

1. The Fair Trading Act (FTA)

Select Key Ideas and Definitions:
The FTA's primary objective is to promote fair, honest, and transparent trading practices, protecting consumers from undesirable conduct before goods or services are supplied. It also empowers ethical traders against those who breach its provisions.

2.1 Key Definitions

• Trade (FTA S21): Broadly defined as any trade, business, industry, profession, occupation, commercial activity, or undertaking related to the supply or acquisition of goods, services, or interests in land.

• Conduct (FTA S22(2)): Encompasses doing, refusing to do, or permitting an act, or communicating an intention to do or not do an act. It can be continuous, a single act, or even inaction.

• Misleading or Deceptive Conduct (FTA S9): Not explicitly defined in the FTA. Courts interpret this based on current business behavior. The assessment involves a three-part test:

  1. Was the conduct capable of being misleading or deceptive?

  2. Was the plaintiff (complainant) in fact misled or deceived?

  3. Was it reasonable in all circumstances for the plaintiff to have been misled or deceived?
     Critical Analysis: A crucial aspect for businesses is that the intent of the trader (whether fraudulent or innocent) is irrelevant when determining a breach of FTA S9. This emphasizes objective impact over subjective motive, mandating careful scrutiny of all business communications and practices.

• False or Misleading Representation (FTA S13): Also not expressly defined in the Act. Courts apply an objective test: would the mind of the average shopper be misled by the representation? It can be made through spoken/written words, conduct, visual images, or sound. The maker of the representation need not know it was false; it is sufficient that it is objectively wrong.

• Injunction: A civil remedy, being a court order to either stop (prohibitive) or compel (mandatory) a specific action. Non-compliance can lead to substantial fines for contempt of court, making it a powerful deterrent.

• Passing Off: A tort (civil wrong) involving the unauthorized use of a trademark or representation that misleads consumers into believing goods/services are associated with another well-known business.

• Bait Advertising (FTA S19): An unfair practice where goods or services are offered at an attractive price without a reasonable intention or capacity to supply them at that price, for a reasonable period, or in reasonable quantities.

• Unsolicited Goods and Services (FTA S21A-D, Part 4): Goods or services supplied without prior request. If the recipient does nothing, the goods become a gift after 1010 working days. The sender is responsible for collection and must inform the recipient of their rights and obligations. Recipients are not liable for unsolicited services.

• Layby Sales (FTA Part 4): Agreements where consumers pay for goods in installments with no interest, and the retailer retains possession until full payment. The agreement must be in writing, clearly describe goods, summarize cancellation rights, state total price, and provide a copy to the consumer. Applies to products under 15,00015,000.

• Uninvited Direct Sales (FTA S21A-D): Sales made at a consumer's home, workplace, or by phone without prior invitation. Applies to transactions over 100100. Consumers have a 55-working day "cooling-off" period to cancel the agreement, either orally or in writing.

• Extended Warranties: Additional paid guarantees for goods/services that often overlap with protections already afforded under the CGA. While legal, they are often unnecessary for consumers. Warrantors must provide clear written documentation and consumers have a 55-working day cancellation right.

1. Critical Analysis of the FTA's Impact

• Shifting Responsibility: The FTA, alongside the CGA, fundamentally shifts responsibility from the buyer to the seller, compelling businesses to adopt more transparent and ethical practices. For accounting students, this means recognizing potential liabilities arising from marketing, sales, and administrative practices.

• Proactive Compliance: The Act's focus on conduct before purchase, coupled with the irrelevance of intent for S9 breaches, necessitates proactive compliance programs within businesses. This includes robust internal controls over advertising, labeling, and sales scripts to prevent misleading information.

• Judicial Role: The absence of statutory definitions for "misleading" or "false" empowers courts to adapt legal interpretations to evolving business practices. This flexibility allows the law to remain relevant but also presents a degree of uncertainty for businesses, requiring constant monitoring of case law.

• Consumer Empowerment: Provisions related to unsolicited goods, layby sales, and uninvited direct sales (with cooling-off periods) significantly empower consumers, reducing pressure tactics and establishing clear rights regarding unwanted items or regretted purchases. This reduces the risk of consumers being exploited by aggressive sales.

• Economic Impact: Enforcement actions, such as substantial fines (e.g., Jetstar's 2.25million2.25million fine), highlight the significant financial risks of non-compliance. Beyond fines, businesses face costs related to corrective advertising, refunds, damages, and implementing new pricing software (as seen with supermarkets). These are critical considerations for financial management and risk assessment.

• Balance of Competition and Protection: While the FTA aims to protect consumers, courts also consider the impact on competition (e.g., Australian Consolidated Press case). This ensures that while unfair practices are curbed, legitimate competition is not unduly hindered, which is important for market efficiency.

1. Summary of Main FTA Sections and Requirements

5. Key Case Law Examples