Legislation to stamp out unfair business practices introduced
Unfair business practices are being targeted in new legislation introduced to Parliament.
Small Business Minister, Stuart Nash, and Commerce and Consumer Affairs Minister, Kris Faafoi, say the Fair Trading Amendment Bill will make two major changes to better protect consumers and businesses.
“The first set of changes will prohibit conduct that is unconscionable,” Kris Faafoi said.
“This is effectively serious misconduct that goes far beyond what is commercially necessary or appropriate.
“Businesses that are found to act unconscionably will face fines of up to $600,000.
“The second set of changes extend existing protections against unfair contract terms in standard form consumer contracts so they also apply to business-to-business trading relationships with a value below $250,000 per year,” Mr Faafoi said.
“The impacts of unfair business and commercial practices can be significant for small businesses and consumers,” Stuart Nash said.
“I’ve heard too many stories about one-sided contracts, extended payment terms, and pressure tactics that are hurting small businesses and consumers.
“Unfair practices make it hard for New Zealand businesses to focus on what really matters – developing their products and services, innovating, and growing their business. It also leads to real hardship for consumers,” Mr Nash said.
“These changes to the Fair Trading Act will draw a line in the sand about acceptable standards of commercial conduct in New Zealand,” Mr Faafoi said.
“The Government has clear expectations that business practices will be conducted fairly and reasonably. At the same time, honest businesses should have no cause for concern about these changes,” he said.
Kris Faafoi said the Bill also complements changes to the Credit Contracts legislation passed by Parliament last week.
The changes will improve protections for consumers against mobile traders and predatory loan shark behaviour.
The Fair Trading Amendment Bill will have its first reading early in the New Year.