John Duffy: Consumer NZ Chief Executive comments on increased fines for breaching the Fair Trading Act

The Government is planning to increase fines for breaching the Fair Trading Act - from 600-thousand dollars to five-million.

It is announcing a swathe of changes to crack down on businesses and individuals breaking consumer laws. 

The cases could also be moved from the criminal court to the Civil Court to make prosecution easier. 

Consumer NZ Chief Executive Jon Duffy told Mike Hosking that it is one of the most consequential changes to the act in a generation. 

He says it will be a deterrent for many companies - but $5million is a drop-in-the-bucket for large multi-nationals. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Change coming for those who reach the Fair Trading Act
finds will increase from six hundred thousand dollars to five million.
Cases are going to move from criminal to similar reason
for that is it's easier prosecution, or so they claim.
John Duffy is Consuming New Zealand's Chief executive and will
us John Morning.

Speaker 3 (00:31):
Morning, Mike.

Speaker 2 (00:32):
Good move, great move, fantastic move. What sort of move
is it?

Speaker 3 (00:37):
It's pretty good. It's probably one of the most consequential
reforms of the Fair Trading Act in a generation. But
as with everything, it wasn't quite everything that consumer advocates
were looking for. But the changes to the penalty regime
very good, very pleased.

Speaker 2 (00:51):
Will it be a deterrant.

Speaker 3 (00:54):
I think so for more companies. There will always be
those companies, you know, big multinationals with deep pockets. Five
million dollars is still a drop in the bucket for
those types of companies. If you compare it to Australia,
they're maximum penalties fifty million Australian dollars. But for kind
of medium sized and domestically located companies. This is a

(01:17):
serious deterrent.

Speaker 2 (01:18):
Yes, right, would you cite Australia as an example of
something that does work or not?

Speaker 3 (01:25):
Yeah, Look, I think the regulator there has real teeth.
And that's not to say our regulator is not doing
a good job. It's to say that the HBC in
Australia is armed with the right tools, and they have
a broader range of tools beyond just big fines. They
can issue infringement notices, They have unfair contract provisions that
can be more easily enforced than the ones here in

(01:48):
New Zealand, so that there's a range of other tools
they have. But this will certainly help embolden our Comics Comission.
We think particularly the move from criminal to civil And.

Speaker 2 (01:57):
So are these mistakes or is this deliberate behavior? In general.

Speaker 3 (02:03):
It can be both, but typically where you have a
business making it genuine error, they will have a potentially
have a defense under the fear trading active of reasonable mistake.
And also sure they might make a mistake. They might
have put out some misleading advertising something like that. Consumers
may have suffered some instrument typically that would be reflected

(02:24):
in any fine that the court imposed, they'd look at
the circumstances of the case and go, actually, this is
at the mild end of the spectrum. We're not going
to give a five million dollar fine. We might give
something lower, but for that really deliberate, intentional stuff, having
a five million dollar fine possible should be a real deterrent, all.

Speaker 2 (02:43):
Right, John, appreciate it, John Duffy, who's the Consumer's Chief executive.

Speaker 1 (02:46):
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