More power to Consumer Affairs
Significant additions to the enforcement “tool kit” of the Director of Consumer Affairs gives increased powers to pursue recalcitrant traders who breach the Fair Trading Act.
Three new enforcement tools have been provided to the Director of Consumer Affairs under amendments to the Act:
- the Director can now apply to the Supreme Court for a “cease trading” injunction
- the Director has the power to issue a “show cause” notice for suppliers believed to be contravening the Act to justify why they should continue trading
- the Director has the power to require businesses to substantiate claims about products.
The changes and their effects can be complex, with subtle differences existing between other sections of the Act.
Cease trading injunctions (s151A)
This power was recommended to help deal with “rogue traders” and people with a history of contraventions or complaints against them.
Show cause notices (s106B)
The Director can issue this notice if there are reasonable grounds to believe that a business or supplier has contravened the Act or regulations, is likely to continue doing so, and if there is a danger that their activities could result in harm, loss or damage to someone else.
Substantiation of claim notice (s106A)
If this notice is issued, a business or supplier must provide “proof of any claim of representation made” in published promotion or promotional material they are responsible for producing. What is a reasonable claim or representation about a product or service is determined by what “ordinary” people would understand from the material. This power focuses on the need to substantiate a claim ( the offence is committed by not substantiating the claim), and differs from provisions in the Act about “misleading and deceptive” or “false or misleading” representation.
Disclaimer:
The information in this newsletter is not intended to be a complete statement of the law relating to the issues raised. Accordingly, no person should rely on this information without first obtaining specific advice from our office. | 
