Fair Trading Act NZ: Misleading Conduct, Unfair Terms, and Penalties

The Fair Trading Act 1986 sets the rules for how New Zealand businesses can advertise, sell, and price goods and services, and it bans misleading, deceptive, and unfair trading practices. The Commerce Commission enforces it, and a Bill before Parliament in 2026 would sharply raise the penalties for breaking 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.

What the Fair Trading Act prohibits

The FTA prohibits misleading and deceptive conduct in trade. A trader breaches this even without meaning to mislead anyone, and it does not matter whether the false impression comes from what was said, from an image, or from something left out, including a misleading detail buried in fine print.

The Act also lists specific false representations that are always illegal, such as false claims about a product's quality, standard, benefits, uses, or origin, false claims about a price advantage, and false claims about a supplier's affiliation or approval. Separately, the Act bans unfair trading practices, including some unsolicited-agreement and pricing practices.

Unfair contract terms

A term in a standard form consumer contract, meaning a contract offered on a take it or leave it basis, must not be unfair. A term is unfair if it would cause a significant imbalance in the parties' rights and obligations, is not reasonably necessary to protect the legitimate interests of the party who benefits from it, and would cause detriment if it were relied on. The Commerce Commission can apply to the court to have an unfair term declared void.

Who enforces it, and what a consumer can do

The Commerce Commission enforces the FTA against traders. It can investigate suspected breaches and respond with compliance advice, a warning, or court action, but it does not generally act on an individual's complaint by pursuing that person's personal remedy. Separately, a consumer can bring their own case under the FTA, including to the Disputes Tribunal or the District Court, which can order things like damages for a loss you suffered, a contract being altered or made void, a refund, or a repair or service being supplied.

Current penalties

As at mid 2026, the maximum penalty for a serious breach of the FTA is $200,000 for an individual and $600,000 for a body corporate.

The Fair Trading Amendment Bill: a proposal, not yet law

The government introduced the Fair Trading Amendment Bill on 13 May 2026 to increase these penalties. For most breaches, including misleading or deceptive conduct, the Bill would raise the maximum to whichever is greatest of $1 million for an individual, $5 million for a body corporate, 3 times the commercial gain made from the conduct, or the value of the transactions involved. The Bill also proposes a safe harbour so an online platform that takes reasonable steps to remove suspected scam content quickly is protected from liability for doing so.

As at mid 2026 the Bill had not passed. Public submissions closed on 16 July 2026 and it was before Parliament's Finance and Expenditure Committee. Until it passes and comes into force, the current, lower penalties above still apply. Check comcom.govt.nz or mbie.govt.nz for the Bill's progress.

Related consumer law

The FTA is about a trader's conduct: being misled, given false information, or held to an unfair contract term. If your problem is instead that a product or service itself is faulty or not as promised, see our guide to the Consumer Guarantees Act. If you are not sure which law fits, see Consumer Guarantees Act vs Fair Trading Act. For the full picture of New Zealand consumer law, visit the consumer law hub.