Media Release 11 December 2013
New Consumer Law clarifies – and confuses
Parliament’s passing of the Consumer Law Reform Bill yesterday finally brings consistency and transparency to consumer
rights – though some big issues remain, Motor Trade Association (MTA) says.
The ‘gestation period’ for this Bill has been long and protracted – it has passed through the hands of two governments
and many Ministers. The motor industry has had opportunity to comment on the content of the Bill and it now looks
forward to implementing it.
“The general thrust of the Bill is positive overall, with big improvements for consumers, in particular. Most provisions
are well defined and clear. Industry will need to establish some new processes and controls to ensure compliance with
the new provisions,” MTA spokesperson Tony Everett says.
However, a few provisions will be more difficult to interpret, and both consumers and industry will be looking for
clarification on how these work. A good example of this is the requirement for disclosure when selling extended
warranties (a product common in the used vehicle industry). Under the new Bill, dealers must define any extra
protections over and above those provided under the Consumer Guarantees Act (CGA).
“The difficulty with this is that the CGA terms of coverage are not defined in absolute terms anywhere. It will be
interesting to see how this new requirement ‘beds-in’,” Everett says.
Another difficult-to-understand issue is the requirement for traders to only identify themselves as a trader when
selling online via an auction process (where the consumer can effectively push a button and buy the good), but not if
they are selling via other means, such as a list advertisement requiring further engagement between customer and seller.
“Consumer rights turn on whether or not the seller is a trader. It would seem logical that traders should declare their
position irrespective of the selling mechanism,” he says.
Nevertheless, MTA is pleased to see increased enforcement powers for the Commerce Commission – “a move that should
enable more efficient and cost effective control of errant behaviour, when and where it occurs,” Everett says.
ENDS