Changes to NZ’s Fair Trading regime – penalties to leap in 2026
The Government has announced changes to the Fair Trading regime for early next year which will see a dramatic increase in penalties. Get in touch if you would like to stress-test your advertising or your Ts & Cs for promotions.
About the Fair Trading Act 1986 (Act)
The Act protects everyone in New Zealand from unfair trading practices and covers everything from ensuring that descriptions and pricing are not misleading through to prohibiting pyramid schemes.
Misleading conduct includes making false claims, exaggerating benefits, or presenting prices in a misleading way, such as:
advertising discounts that don’t offer genuine savings;
hiding surcharges; or
displaying prices that differ from the amounts charged at checkout.
The Act also deals with unfair contract terms and has specific requirements for certain types of sales conduct such as uninvited sales and auctions.
Proposed new penalties
Penalties for breaching most provisions, including misleading and deceptive practices, will increase (currently a maximum of NZD200K for individuals and NZD600K for body corporates) to the greater of:
NZD1m for individuals; or
NZD5m for body corporates; or
3 times the value of the commercial gain made or loss avoided; or
the value of the consideration for the transaction(s) that constituted the contravention.
Maximum penalties for breaching consumer information requirements, consumer transaction rules, and impeding enforcement will all increase:
from NZD10K to NZD60K for individuals; and
from NZD30K to NZD200K for body corporates.
However, most breaches will move from criminal to civil liability. Conduct that is serious or deliberate will remain criminal offences – such as
serious product safety breaches; or
obstructing the Commission in its enforcement role.
The courts will continue to have discretion to consider a range of factors when imposing penalties under the Act – including:
the nature of the conduct;
whether the firm has breached the Act before; and
the size and scale of the firm.
Timeline for changes
Legislation to amend the Act will be introduced to Parliament in early 2026, with the changes expected to become law later in 2026.
As a final note, just as we were about to publish this article, the Australian Government announced a ban on unfair trading practices, with the Commonwealth Government to consult on draft legislation in early 2026. The ban will add to consumer protections from existing Australian Consumer Law prohibitions and from what we have seen will likely carry penalties of up to $50 million per breach.