17 Jun 2014

Tougher consumer laws in place

9:22 pm on 17 June 2014

Law changes giving all shoppers the same rights under the Consumer Guarantee Act, whether they buy online, by auction, over the phone or in shops have come into force.

Business owner with tablet looking at clothing for sale in her shop.

Photo: PHOTO NZ

Under the new rules, consumers can cancel extended warranties after five working days, and get the right to ask retailers what benefits such warranties offer in addition to the Consumer Guarantee Act.

Businesses selling via online auctions must identify themselves as traders, and if a consumer has asked for goods bought online to be delivered, the trader is responsible for ensuring they arrive in good condition and on time.

A cooling-off period of five working days will apply to transactions made after uninvited direct sales, including door-to-door and telephone sales.

It is also illegal for businesses to make claims about their products that they can't back up.

Traders face tougher penalties, with individuals breaching either the Consumer Guarantees Act or the Fair Trading Act in line for fines of up to $200,000 compared with $60,000 previously. Businesses face fines of up to $600,000 compared with $200,000.

Consumer Affairs Minister Craig Foss said auctions were a good example of where the law had been lacking.

"With auction sites, if someone clicked a 'buy now' on one of the auction sites they were covered under the Consumer Guarantees Act. If they participated in an online auction for the same goods, they actually weren't covered."