Consumer Rights: Your Guide Against Misleading Prices And Advertising

Date Dec 3, 2020
Blog category Broadband
Blog category Mobile Phone
By Staff Writer

Retailers in New Zealand have the freedom to set their prices. Under the Fair Trading Act (FTA), they’re also free to increase their prices as long as there’s a fair reason behind the increase. They’re not allowed to mislead with their prices either by writing incorrect descriptions or purposely indicating mistaken prices.

If the prices were found to be misleading, however, what can you actually do about it? What are your rights as a consumer? How can the FTA protect you from incorrect or misleading price increases? Know your rights as a consumer through this blog.

What qualifies as a misleading description?

A misleading description is purposely deceiving the buyer to justify the price. For example, a retailer advertises a $2,500 car has an updated Warrant of Fitness, meaning it has been inspected within a month. You decided to purchase the car, but it broke down after just two months of light usage. This means the WoF isn’t updated.

When you contact the retailer, it refuses to negotiate to shoulder the repair costs of $1,500. This can be subject for a claim in the Dispute Tribunal for breaching the Contract and Commercial Law Act of 2017. 

What can be considered as a pricing mistake?

Otherwise, it can be considered a pricing mistake. It’s an honest mistake that can be due to expired promotion or advertising. For example, you went to your local retail store after seeing an advertisement on TV about their 50% off discount. However, the items you want are at regular prices after going to the store.

The retailer explains it was due to outdated promotion. They also ordered to have it taken down immediately to avoid further confusion — this is an honest mistake. However, if you still see their advertisements a day or two after your complaint, it can be subject to misleading conduct.

What are your rights as a consumer?

The FTA ensures you the right to accurate pricing as well as factual advertising for products and services from all retailers in New Zealand. This protects you from misleading and deceiving prices including:

  • Writing false or misleading descriptions about products and services
  • Making claims about products without concrete evidence
  • Utilising false sales and marketing practices such as bait advertising

Take a closer look at what covers your rights as a consumer against different situations.

Against incorrect or misleading pricing

Displayed and advertised prices must be charged as it is; any extra costs must be stated before checking out at the counter. Any additional charges without your prior knowledge can be subject to breaking the FTA by misleading the true prices of the products and services.

Against false price discounts

Retailers have the right to make price discounts as they seem fit with their business strategy. However, they must do it truthfully or else, it’s subject to breach of the FTA. This includes advertising the product as discounted, even if it's the regular selling price.

Against misleading advertising

Misleading advertising is deliberately lying or excluding facts about the prices, origin, quality, uses, benefits, or history of the products and services. This includes advertisements in brochures, signs, newspapers, TV, radio, or websites. As mentioned, misleading advertising or description is a breach against Contract and Commercial Law Act of 2017. 

Against false or unsubstantiated claims

Making claims even without proven scientific evidence is a direct violation of the FTA. This includes making sustainable claims about energy efficiency, carbon neutrality, and more. Given its relevance, this specifically includes herbal and medicinal products claiming to be the cure or prevention against COVID-19. 

How can you complain about misleading descriptions?

There are several ways to submit your complaints if things ever escalate. The first thing you can do is to contact the seller and dispute your claims of false or misleading price descriptions. Depending on your claim, you may get compensated through a partial refund, and exclusive discount codes, among others.

If this doesn’t work and the seller doesn’t cooperate, you can escalate your claims to designated authorities. Here’s what you can do:

Take it to the Disputes Tribunal

If you fail to resolve the dispute with the retailer, you may escalate it to the Disputes Tribunal or District Court. You may report the dispute if you think you’ve been misled or lied to about the product information. 

Bear in mind that the Commerce Commission may not be able to investigate every complaint. However, they can use your disputes to warn businesses against misleading pricing strategies and tactics. Also, they may not be able to commence proper investigation against overseas sellers as it may not be included in their jurisdiction or scope.

To file a complaint, visit the Commerce Commission New Zealand website.

Get help from independent service centres

You may also get professional advice from independent service centres such as Citizens Advice Bureau (CAB) and Community Law Centre. They can advise you on your consumer rights and obligations. 

Stay updated about consumer rights

Starting this holiday season, make sure you know your consumer rights. Protect yourself against misleading price descriptions, false advertising, and other lying tactics of some retailers in New Zealand. Get the latest updates on consumer rights by connecting to an unlimited broadband plan!

Compare the unlimited broadband plans using CompareBear’s broadband comparison tool.