The new year brings with it new rules and regulations. To help you stay on top of things, here is a taste of what will be served up this year.
Consumer Law Reform
The Consumer Law Reform Bill, containing the most significant changes to New Zealand consumer law in over 20 years, was passed into law late last year. We set out below three key changes that all businesses should be aware of going into the new year.
Increase in Fair Trading Act 1986 (FTA) PenaltiesAs from 18 June 2014, the FTA penalties will increase three-fold - jumping from $60,000 to $200,000 for individuals and from $200,000 to $600,0000 for body corporates. This means that a breach of the FTA could now cost you a lot more than a slap on the hand. These penalties are serious, and therefore compliance with the FTA is as important as ever.
Unsubstantiated RepresentationsAs from 18 June 2014, unsubstantiated representations will be prohibited. This means that any claim you make about your product, that a reasonable person would expect to be substantiated, must in fact be substantiated before you make the claim.
A claim does not need to be false or misleading in order to break the rules. Even if your claim is true, you will still be committing the offence if you do not hold evidence to support your claim at the time the claim is made.
A breach of this provision is serious. Those found to have made an unsubstantiated representation will be liable to the recently increased fines set out above.
Unfair Contract TermsThe Commerce Commission may seek a court order declaring that a term in a standard form consumer contract is "unfair". A contract term may be considered "unfair" if it would cause unfair detriment (whether financial or otherwise) to a party if it were applied, enforced, or relied on. For example, a term that gives one party the right to unilaterally vary the terms of the contract.
Enforcing or including such a term will be an offence under the Act and could see you fined up to $600,000 for a body corporate, or $200,000 for an individual. Although this change will not be in force until 18 March 2015, it is important to review your contracts this year in light of the upcoming change.
So, what does this mean for you and your business?
Now is a good time to review your advertisements, labels, websites, policies and procedures. Ensuring that your business is compliant with the upcoming changes will mean you can rest easy when the laws come into effect.