This is a further article in our series of important changes to consumer law under the Fair Trading Act and Consumer Guarantees Act.
The internet has significantly changed the way consumers purchase goods and services online. Traders selling online need to make sure that they comply with the Fair Trading Act and the Consumer Guarantees Act. The Consumer Guarantees Act applies to goods and services that are ordinarily purchased from a trader for personal, domestic and household use.
Under the Fair Trading Act, traders are now required to make it clear to potential purchasers that they are ‘in trade’ so that consumers know they are protected under the Fair Trading Act and Consumers Guarantee Act. Traders will need to disclose their trader status clearly and prominently on their web site.
It will be an infringement offence punishable by a fine of $30,000.00 for a Company or $10,000.00 for an individual to fail to disclose their trader status. However, the Commission may instead issue an infringement notice with infringement fees to be set by regulation.
What is ‘in trade’? This will depend upon the specific circumstances of the seller/trader such as whether the trader:
- regularly or habitually offers to sell goods or services online;
- makes, buys or obtains goods with the intention of selling them;
- is registered for GST;
- has staff or assistants to help manage its sales;
- has incorporated a Company or set up another type of trading vehicle.
In addition traders cannot avoid their obligations under the Fair Trading Act or Consumer Guarantees Act by having someone else make offers or sell on their behalf. In these cases the principle seller will still be ‘in trade’, and the person selling on their behalf (their Agent) may also be liable.
Anyone selling goods initially bought or acquired for their own personal use is not ‘in trade’.
If you are an online seller and you are unsure as to whether you are ‘in trade’ or will be caught by these new laws you should seek legal advice.
We are experienced in all aspects of business and commercial law.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Simon Milne
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.