NZ Cracks Down on Misleading Pricing and Online Scams Under Fair Trading Law Overhaul

The New Zealand Government is moving to dramatically strengthen consumer protection laws, introducing tougher penalties for misleading pricing, new powers to combat online scams, and faster product safety regulation updates under a sweeping overhaul of the Fair Trading Act.

Economic Growth Minister Nicola Willis and Commerce and Consumer Affairs Minister Cameron Brewer today unveiled the Fair Trading Amendment Bill, saying the reforms are designed to stop deceptive business practices and restore consumer confidence during a period of intense cost-of-living pressure.

The proposed changes would significantly increase financial penalties for businesses that mislead consumers and establish a new legal framework enabling faster removal of scam content online.

Government Targets “Dodgy” Pricing Practices

The reforms come amid growing public frustration over supermarket pricing errors, misleading promotions and false discounts.

Willis said consumers should be able to trust that advertised prices are accurate.

“It’s very simple, the price that Kiwis see on the shelf or in the supermarket aisle should be the price they pay at the checkout,” she said.

The Government says too many shoppers are currently facing:

• Incorrect checkout pricing

• Misleading “special” promotions

• False discount claims

• Pricing discrepancies between shelves and tills

“We know that New Zealanders are watching every dollar, but too many shoppers are being misled,” Willis said.

“Whether they’re being charged more than the advertised price or being sold a ‘special’ that isn’t really a saving — that’s not acceptable.”

Penalties to Increase Dramatically

One of the Bill’s most significant changes is a major increase in financial penalties for breaches of the Fair Trading Act.

Currently:

• Maximum corporate penalties are capped at:

  • $600,000

Under the proposed reforms, companies could face penalties of:

• Up to:

  • Three times the commercial gain

  • The value of affected transactions

  • Or up to $5 million

The Government says the current penalties are too low to deter large corporations from engaging in unlawful conduct.

“That’s why we’re lifting penalties for misleading pricing and conduct — so big businesses can’t treat breaking the law as a cost of doing business,” Willis said.

Officials argue the tougher penalties will better reflect:

• Consumer harm caused

• Financial benefit gained by offenders

• The scale of modern retail operations

Consumer NZ Campaign Helped Drive Reform

The legislative changes follow mounting concern over pricing accuracy in major retail chains.

The Government specifically referenced:

• Consumer NZ’s “Price it Right” petition

• Commerce Commission findings estimating pricing errors may cost consumers:

  • Tens of millions of dollars annually

Consumer advocates have increasingly argued that inaccurate pricing disproportionately harms households already under financial pressure from:

• Inflation

• Rising food prices

• Housing costs

• Higher living expenses

New “Safe Harbour” Law Targets Online Scams

The Bill also introduces a new “safe harbour” legal defence aimed at helping online service providers remove scam content more rapidly.

Under the proposal:

• Internet platforms and service providers would gain legal protection when removing suspected scam material

• Providers must still take “reasonable precautions” before takedowns

Commerce and Consumer Affairs Minister Cameron Brewer said the changes are intended to improve responses to increasingly sophisticated online fraud.

“Scams are becoming increasingly sophisticated, and this safe harbour defence, developed with industry support, gives providers the confidence to stop them,” Brewer said.

The Government says current legal uncertainty sometimes discourages platforms from removing suspected scam websites or fraudulent content quickly enough.

The reforms are expected to support faster intervention against:

• Fake retail websites

• Investment scams

• Phishing operations

• Fraudulent online advertisements

Product Safety Rules Also Being Modernised

The legislation also seeks to streamline how product safety standards are updated.

Officials say the current system is often:

• Slow

• Administratively burdensome

• Outdated relative to international standards

The reforms are intended to:

• Reduce unnecessary compliance costs

• Improve regulatory responsiveness

• Align more closely with international safety frameworks

• Maintain consumer safety protections

Brewer said the changes would help New Zealand respond more quickly to evolving product risks while reducing unnecessary complexity for businesses.

Government Says Honest Businesses Will Benefit

Ministers stressed that the reforms are not aimed at the majority of businesses that already comply with consumer laws.

“Most businesses follow the rules. Some don’t, which is where we’re seeing misleading pricing and promotions that short-change shoppers,” Willis said.

The Government argues stronger enforcement will create a fairer competitive environment by ensuring businesses compete honestly rather than through deceptive practices.

“These changes back honest businesses by making sure competition is based on playing by the rules, not cutting corners,” Willis said.

“When people can trust what they’re buying, and those who cheat face real consequences, it lifts confidence and supports a stronger, more competitive economy.”

Bill Headed to Select Committee

The Fair Trading Amendment Bill will soon be referred to a Select Committee for a six-month consultation process.

The Government is encouraging:

• Businesses

• Consumer groups

• Industry bodies

• Members of the public

to provide submissions on the proposed changes.

“Our message to dodgy traders is simple: follow the law or pay the price,” Brewer said.

Broader Consumer Protection Push

The reforms reflect a broader international trend toward stronger consumer protection enforcement as governments respond to:

• Rising digital fraud

• Cost-of-living pressures

• Online marketplace expansion

• Growing concerns about corporate accountability

Consumer law experts say the proposed penalty increases would place New Zealand more closely in line with stronger international enforcement models used in jurisdictions such as:

• Australia

• the European Union

• the United Kingdom

The success of the reforms, however, will likely depend on:

• Enforcement resources

• Regulatory oversight

• Business compliance

• Consumer awareness

If passed, the legislation could represent one of the most significant upgrades to New Zealand’s consumer protection regime in years.