Commerce Commission staff carry out an unannounced visit to a Christchurch retailer. Photo / Supplied
Commerce Commission staff carry out an unannounced visit to a Christchurch retailer. Photo / Supplied
New Zealand's consumer watchdog is ramping up its crackdown on online traders and lending companies which it alleges may have breached consumer laws.
The Commerce Commission often shops posing as consumers and buys things it suspects do not comply with safety standards. The products are then sent for testing as part of an investigation.
In the past six years the commission has brought 62 prosecutions for Fair Trading Act breaches, and 23 prosecutions for breaches of the Credit Contracts and Consumer Finance Act.
In the year to June 30 more than 7000 consumers complained to the regulator.
Most complaints were about pricing and representation of services or goods, with telecommunications and appliance retail the most complained about industries.
The Commerce Commission was established in the mid-1970s, just before the Muldoon government came into power, at a time where there was a strong emphasis on price and wage control.
The Consumer Act came into effect in May 1986 and the Fair Trading Act was passed into law in December 1986, replacing the Consumer Information Act.
Since then the commission has investigated thousands of consumer law cases, dealt with 3000 merger applications and determinations.
The largest Fair Trading Act penalty ever handed out was $1.08 million to Reckitt Benckiser for 10 breaches relating to its Nurofen range of pain relief tablets.
In the past five years the number of cases brought to court by the commission has almost doubled in each consecutive year, with the exception of the 2016/17 year.
The commission brought forward 21 prosecutions under the Fair Trading Act in the 2017/18 financial year, up from 12 the previous year.
So far, for the current financial year running to June 30, 2019, it has brought forward seven prosecutions.
There are also a number of ongoing investigations which it expects will end up in court, Rawlings said.
Retail telecommunications, responsible lending and online retail are the regulator's focus areas for the 2018/19 financial year.
Prosecutions against traders this year include a Palmerston North man who sold an unsafe cot on Trade Me, retailers NZSale and Goodwear selling unsafe children's nightwear with incorrect or no fire-hazard labels, and The 123Mart for selling toys designed for those aged 3 and under three, found to have choking-hazards.
As the work programme has shown in recent years, there can be some serious sanctions for failing to comply.
Under the product safety arm of investigations, the commission often conducts unannounced site visits to retailers and traders. These are also part of the process for country of origin labelling and pricing investigations, but not all consumer protection audits.
In the past two years it has carried out more than 200 unannounced visits.
"Unannounced visits enable us to educate traders about what they need to be doing to comply with the law, but it also builds our intelligence on where risks might be for breaches of laws," Rawlings said.
Commerce Commissioner Anna Rawlings. Photo / Supplied
"We've had a series of prosecutions relating to the sale of toys that didn't pass product safety standards as a consequence of unannounced visits."
Rawlings said cases often took more than a year to resolve, but relatively few were resolved by the way of prosecution.
It also hosts discussions with traders and issues written warnings.
"All traders need to make sure they are aware of their legal obligations when they're selling their products whether in bricks and mortar stores, or online," she said.
"As the work programme has shown in recent years, there can be some serious sanctions for failing to comply."
