Act will increase consumer protection

Press, 19 February 1987, Page 11

Act will increase consumer protection

On March 1 a new trading act will come into force, bringing with it more protection for the consumer and stiffer penalties for crooked dealers.

The Fair Trading Act will cover all commercial activities but will have particular impact on misleading or deceptive advertising and trade.

Retailers and the Consumers’ Institute see the act as being, in the main, a good thing, even “well overdue." But the institute is concerned that the legislation does not go far enough. David Russell, the assistant director of the institute, says the act will cut down on such things as misleading price comparisons, “where a shop claims they used to charge a figure and we find out they have never charged that figure.” But he says it still does not address “unconscionable trading," trading that does not use. outright deception but employs littleknown loopholes to take advantage of a customer. One example of this practice was customer credit insurance, most used in the used car

trade, said Mr Russell. The policy covers the customer in the event of being unable to meet repayments because of an accident death, or redundancy.

“The dealer , buyers wholesale policies and then retails it. One of the worst examples we have come across is where the dealer has charged $l5OO on a $5OO policy.” Mr Russell said the present Government policy that competition would regulate the market failed on two counts. One, the disadvantaged customer,* and two, the country’s size, which meant some areas, particularly rural parte, did not get the necessary competition. “For another example, an old woman was over 80, bed-ridden, and she wanted a vine removed from her trellis. Two guys spent less than an hour removing it and charged her $420.

“At present the law says she was a silly old woman and should have got comparative quotes ... There are no sanctions against profiteering.” However, the Fair Trading Act was “in general, very, very good and

would go a long way” toward clearing up deceptive trading. The Retailers’ Federation has expressed concern that the act is too vaguely worded and could be taken to extremes on an honest trader.

But the president of the Canterbury-Westland Retailers’ Association, Mr Mark Ballantyne, does not foresee much change for most traders.

“As with all pieces of legislation,, there are always grey areas which are open to abuse. I think when things are up and running, grossly unfair practices will be obvious and they will be corrected.”

It was still a case of “buyer beware,” he said.

Based on Australian laws which have been in force for 10 years, the Fair Trading Act will give individuals more power to bring legal action against a trader. It also includes new safety standards for products. If convicted of misleading conduct, companies face fines of up to $lOO,OOO ■ and individuals face up to $30,000.