9 Changes to the CGA retailers should know about.

At the end of last year, in a rare display of bipartisan collaboration, the government pushed through major reforms to the Consumer Guarantees Act. Six months on these changes will take effect from June 17th 2014.

Here is a quick summary of the changes that will ultimately effect retailers in New Zealand:

  1. Online Retailing: All online purchases and trades are now subject to the Consumer Guarantees Act (including TradeMe Auctions & Facebook Shops).
  2. Online Retailing: Professional online sellers will have to clearly identify themselves as “traders”
  3. Online Retailing: There is also increased liability for traders whose goods do not arrive on time, or are damaged during delivery.
  4. Online Retailing:  “Shill bidding”, in which traders try to drive up prices on their own auctions, has been clarified to make it a specific offence.
  5. Extended warranties: A new amendment will force retailers to provide a comparison of what additional “guarantees” or benefits their extended warranty actually has.
  6. Extended warranties: Customers will also now have five working days to cancel the warranty (get a refund). Or, if the retailer did not disclose the differences to you in the first place, they can get a refund at any time.
  7. Advertising: An update to the Fair Trading Act (FTA) means businesses will not be able to make claims about a product or service if they do not have evidence or “reasonable grounds” to do so. Obviously exaggerated claims, and puffery, will still garner some leeway. But serious claims, which could be as simple as “all gumboots half-price”, have to be accurate.
  8. Door-to-door: Customers will now have five working days to cancel any uninvited direct sale made at home or work. And it does not matter whether the sale is over the phone or in person; if you did not initiate the transaction, you can back out.
  9. Gas & Electricity: There is a new acceptable quality guarantee in the Consumer Guarantees Act that specifically applies to the supply of electricity or gas. From 17 June 2014, if you supply electricity or gas to consumers, you must ensure your supply is: safe, reliable (to that particular place); and of such a quality that it can be consistently used.

It should also be noted that there are now tougher penalties. Those who breach the rules will receive more than a slap on the wrist, with fines for misleading and deceptive conduct having been increased by at least 300 per cent under the reformed laws.

Author: Edward Bell (Senior Creative)