Consumer Guarantees Act vs Fair Trading Act: Which NZ Law Applies?

The Consumer Guarantees Act and the Fair Trading Act are New Zealand's two main consumer protection laws, and they answer different questions. The Consumer Guarantees Act asks whether the product or service itself was good enough; the Fair Trading Act asks whether you were misled about it.

This is general information about New Zealand consumer law, not legal advice. For your situation, consult a lawyer or your local Community Law centre.

When the Consumer Guarantees Act applies

The CGA applies when the problem is with the product or service itself. Typical examples include a new appliance that stops working within its expected life, furniture that arrives with a manufacturing defect, a repair job that was not done with reasonable care and skill, or an item that does not match its description in a way that matters, such as different dimensions or materials from what was advertised. See our full guide to the Consumer Guarantees Act for the guarantees and remedies in detail.

When the Fair Trading Act applies

The FTA applies when the problem is about what you were told, shown, or not told, rather than the item itself. Typical examples include a salesperson claiming a used car has never been in an accident when it has, a discount advertised against an original price that was never actually charged, a fee that only appears after you have committed to buy, or a contract term that unfairly favours the business. See our full guide to the Fair Trading Act for what it prohibits and how it is enforced.

When both laws can apply to the same purchase

The two laws are not mutually exclusive. A product advertised as suited to a specific purpose it does not actually achieve, that also turns out to be poorly made, can raise both a false representation issue under the FTA and a quality issue under the CGA. You are not limited to picking one; each law gives you a separate avenue.

Which law fits my situation?

Ask what actually went wrong. If the item or service itself is not performing the way it reasonably should, that points to the CGA and its repair, replace, refund, or compensation remedies. If the problem is what you were told or shown before you bought it, that points to the FTA. If a business tries to avoid a CGA remedy with a 'no refunds' policy, that attempt can itself raise an FTA issue, since a trader cannot contract out of the CGA.

Related consumer law

For the guarantees and remedies in full, see Consumer Guarantees Act. For misleading conduct, unfair contract terms, and current penalties, see Fair Trading Act. For the full picture of New Zealand consumer law, visit the consumer law hub.

Frequently Asked Questions

Is the Consumer Guarantees Act the same as the Fair Trading Act?

No. The Consumer Guarantees Act covers whether a product or service itself is good enough, such as acceptable quality, fitness for purpose, and matching its description. The Fair Trading Act covers the trader's conduct, such as misleading statements, false claims, and unfair contract terms.

Can I use both the Consumer Guarantees Act and the Fair Trading Act for the same purchase?

Yes. The two laws can apply to the same purchase if it involves both a fault in the product or service and misleading conduct by the trader. They are separate legal avenues, not alternatives you have to choose between.

A shop told me something false about a product I bought, which law applies?

That points to the Fair Trading Act, which prohibits misleading and deceptive conduct and specific false representations, regardless of whether the product itself later turns out to be faulty.

My new appliance broke after a few weeks, which law applies?

That points to the Consumer Guarantees Act, which guarantees that goods are of acceptable quality and sets out repair, replace, refund, or compensation remedies when they are not.

Who enforces each law?

The Consumer Guarantees Act is self enforcing: you take your own action against the supplier, including to the Disputes Tribunal if needed. The Fair Trading Act is enforced primarily by the Commerce Commission, though a consumer can also bring their own claim under it.