Our monthly review helps you to keep tabs on consumer law developments in New Zealand and overseas. This edition looks at a recent New Zealand case on consumer law related issues and reviews updates from the Australian Competition and Consumer Commission (ACCC), Privacy Commission and the New Zealand Advertising Standards Authority
Consumer law cases
Godfrey Hirst NZ Ltd v Cavalier Bremworth Ltd
In this case, Godfrey Hirst claimed that Cavalier Bremworth (Cavalier) had used misleading headline representations in relation to trade warranties for synthetic carpets, and was therefore in breach of the Fair Trading Act (the Act), particularly ss 9 and 13(i). The issue on appeal was whether the High Court correctly set the bar for what is to be expected of consumers faced with headline representations in advertising, and qualifiers to them.
The Court of Appeal held that the High Court did not apply the correct principles and may have taken an overly restrictive view of the consumers targeted by Cavalier’s website.
The Commerce Commission has labelled the decision a win for consumers and a reminder to traders that it is “not good enough to hide important information in the fine print”, or where the customer must hunt for it. must hunt for it.
Warning to real estate agents
Complaints about real estate agents passing on potential house buyers’ personal information to marketers without their permission has triggered the Privacy Commissioner to issue a stern warning. The Commissioner emphasised that this exercise should not extend beyond simply recording the information unless the person is given a choice to opt-in to receive marketing information.
Global Privacy Sweep raises mobile app concerns
The annual Global Privacy Enforcement Network Privacy Sweep found nearly one in three apps surveyed appeared to request access to information that exceeded their functionality, including in New Zealand. The Privacy Commissioner has developed guidelines for app developers to help them understand their legal obligations under the Privacy Act when collecting personal information through apps.
Better practice in the “big data” era
The Privacy Commissioner continues to highlight several recent foreign privacy organisations’ reports that offer recommendations for better practice in the “big data” era, and emphasise the importance of consent.
Advertising Standards Authority (ASA)
The ASA has partially upheld a claim against the website advertisement for the InSinkErator. The advertisement was headed “Environmental Benefits” and included statements such as “Our food waste disposers provide a convenient and environmentally friendly alternative to transporting leftovers to landfills.”
The ASA ruled that the advertiser had substantiated the statement that waste disposal units did offer tangible “environmental benefits”. However, the statement “environmentally friendly”, was an absolute environmental claim and, as such the advertiser was required to provide substantiation. It noted that the advertiser had supplied its own proprietary information regarding the environmental benefits of the InSinkErator but had not produced any independent studies or evidence that was robust enough to support the absolute claim.Therefore, the ASA ruled that the statement “environmentally friendly” was misleading.
The ASA has ruled that the Rainmaker H20 website advertisement is misleading and deceptive. The relevant advertisement promoted the benefits of the device by stating it would “add life, structure and energy to water”. The ASA held that in the absence of any evidence to support the claim, the advertisement was likely to deceive and mislead the consumer as to the device’s efficacy.
Australian Competition and Consumer Commission
Australian Football League membership representations
The ACCC has warned the Australian Football League (AFL) and a number of AFL clubs about their failure to adequately disclose to consumers that attendance at high demand games would incur costs in addition to their membership fees. The ACCC was concerned that the AFL and certain clubs used marketing material which was likely to create the impression that the membership fee entitled the member to attend a specific number of games with no additional cost. In fact, AFL members and general admission AFL club members were required to pay extra to attend ‘reserve’ classified games that had originally been promoted as part of their membership entitlements.
Misleading consumer guarantee representations
The ACCC has instituted proceedings in the Federal Court of Australia against American gaming company Valve Corporation (Valve) alleging that Valve made false or misleading representations regarding the application of consumer guarantees under the Australian Consumer Law. Valve owns and operates an online computer game distribution platform known as ‘Steam’ that has over 65 million users worldwide. Valve sells computer games through Steam to Australian consumers, but does not have a physical presence in Australia.
The ACCC alleges that Valve’s false or misleading representations included excluding, restricting or modifying the statutory guarantees and/or warranties that goods would be of an acceptable quality, and stating that the statutory consumer guarantees did not apply to games sold by Valve.
The ACCC says that this is prohibited by the Australian Consumer Law.
Unsafe product representations
The ACCC has also instituted proceedings against Woolworths alleging the company made false or misleading representations about the safety of three Woolworths home brand products: a deep fryer, drain cleaner and safety matches. The ACCC alleges that by offering these products for sale, Woolworths represented that they were safe when in fact they were not safe. By then continuing to sell them after becoming aware that they may have caused serious injury, Woolworths continued to make the false or misleading representations.