Consumer law update 2024

We have seen a flurry of consumer law changes in 2024, in large part driven by the (relatively new) coalition Government and a Minister of Commerce and Consumer Affairs, Andrew Bayly, keen to make his mark.

Here we set out some of the key updates from this year and look towards what is coming in 2025.

Changes this year

Business Payment Practices Act 2023

The Business Payment Practices Act 2023 (BPPA) was repealed in March before it was due to take effect. The BPPA would have required large businesses to disclose payment information on a public register. The register was intended to encourage large businesses to maintain good payment practices.

Andrew Bayly, in his capacity as Minister for Small Business and Manufacturing, argued that the BPPA was ineffective in addressing the issue it was seeking to overcome. In a Cabinet Paper proposing to repeal the BPPA, the Minister outlined alternative ways to address late payments. These include:

• requiring government and Crown agencies to adopt faster payment times;

• working with businesses to prepare an industry-led voluntary code to ensure small businesses are paid promptly; and

• raising awareness of the rights of small businesses under the Fair Trading Act 1986 (FTA).

We are starting to see these plans come into effect – the Minister has recently rewritten the Government Procurement Rules so that government agencies adopt eInvoicing. The Minister has made it a requirement for around 135 agencies to pay 90% of domestic invoices within 10 business days (from 1 January 2025) – and increasing to 95% from 1 January 2026.

There is no indication when a voluntary code will be released – in the meantime, businesses still have the option of obtaining a company’s credit information through a credit agency to assess what that company’s payment practices are like.

Fair Trading (Gift Card Expiry) Amendment Act 2024

The FTA has been amended by the Fair Trading Act (Gift Card Expiry) Amendment Act 2024. This legislation prohibits the sale of gift cards with an expiry date of less than three years from the initial sale date.

Businesses that provide gift cards should be aware that they have an 18 month transition period (from 16 September 2024) to prepare their systems and sell any existing card stock. This means from March 2026, any business breaching the new rules could be convicted of an offence under the FTA and liable for a fine of up to $30,000 (or $10,000 if an individual).

Commerce Commission v Viagogo

The High Court released its decision in the long-running dispute between the Commerce Commission and Viagogo. The Court held that Viagogo had committed several breaches of the FTA by making false or misleading representations.

The Court also declared an exclusive jurisdiction clause in Viagogo’s terms and conditions to be unfair (and therefore invalid). The clause required all disputes brought by Viagogo’s customers to be resolved in Geneva, Switzerland – but allowed Viagogo to choose between Geneva or the customer’s location if it brought the dispute. This lack of symmetry and the fact that Viagogo, as a large online business, could easily participate in disputes anywhere in the world (either by videoconference or by appointing a representative to attend a hearing on its behalf) contributed to the Court’s decision.

However, the Court did not find the Swiss governing law provision to be unfair. The Court decided that requiring disputes to be resolved according to Swiss law did not significantly imbalance the parties’ rights and, broadly, Swiss and New Zealand law were similar on consumer law issues.

Although Viagogo has said that it will appeal the judgment, the decision shows it continues to be important for companies doing business in New Zealand to have their terms and conditions reviewed to reduce the risk of unenforceability.

Changes on the horizon

Anti-scam efforts

You may have seen (or received notifications) that banks are starting to roll out confirmation of payee technology – with full implementation by Easter 2025. This technology will let customers check whether an account name matches the account number before making a payment. It is hoped that this will be a relatively simple way to prevent people being taken advantage of by scammers.

The Government has indicated that it intends to take further action on scams. In November, Andrew Bayly (who was appointed as the lead minister to co-ordinate anti-scam efforts) set out a plan to strengthen New Zealand’s anti-scam response. This involves:

• implementing mechanisms for real-time information sharing across, and between, industries (such as banking, telcos and social media platforms) and Government; and

• an alliance with Singapore and Australia to establish a coordinated regional approach.

The Minister has been vocal in pushing banks to propose an industry-led framework for compensating victims of scams. This is in contrast to Australia where the Federal Government has announced it will legislate for an “anti-scam code” to apply to banks, telcos and social media platforms – and a hefty AU$50 million fine for non-compliance. While there is no indication that the New Zealand Government wants to pursue that approach, the Minister has said he will discuss the Australian legislation with his ministerial counterpart.

Commerce Commission activity

In his annual letter of expectations to the Commerce Commission, Andrew Bayly set out his specific expectation that the Commission “be a brave, efficient and effective regulator”. The Minister stated that he expects the Commission to use all the “tools” in its arsenal and use its litigation fund to “its full effect”.

In response to the Minister’s letter, the Commission has said that there will be an increase in enforcement activity (especially under the Commerce Act 1986) – this indicates we can expect to see more investigations launched and action taken by the Commission in the coming 12 months. Just this month the Commission published its 2024-25 priorities – these include doing more to prevent cartel behaviour, cracking down on non-compete agreements, protecting consumers from illegal online sales conduct, investigating breaches in the grocery and telco sectors, and acting against unconscionable conduct.

Consumer Guarantees (Right to Repair) Amendment Bill

The Consumer Guarantees (Right to Repair) Amendment Bill was drawn as a private members’ bill and introduced to Parliament in 2024.

The Bill proposes to expand the guarantees given by manufacturers under the Consumer Guarantees Act 1993. In particular, it would require manufacturers to provide consumers with the “most recent version of any information, spare parts, software, and other tools that the manufacturer uses for diagnosing, maintaining or repairing the goods”. Consumers would have the right to request a repair rather than replacement of goods (which must be done in a reasonable time).

At the time of writing the Bill has yet to receive its first reading and it is unclear whether it will receive support across Parliament. However, it is expected that if it does pass first reading it will require some amendment by the relevant Select Committee. The Bill is broadly drafted to apply to all goods (including digital or intangible goods) – this does not seem to align with its purpose, which is to reduce the amount of landfill waste.

Modern slavery regulation

In 2023, the previous Government announced that it intended to introduce legislation to tackle modern slavery by requiring organisations and businesses to be transparent about their operations and supply chains via a new public register. This proposal largely reflected work we were seeing the private sector lead the way on. It is increasingly common for contracts to contain commitments that parties must complete proper due diligence on suppliers and have implemented robust modern slavery checks.

The current Government has said that it will not advance the previous Government’s proposals. However, it is not clear what steps the Government proposes to take – especially as New Zealand is expected to have some sort of statutory modern slavery safeguards in place to comply with our recently signed EU and UK free trade agreements. It will be interesting to see what, if anything, the Government will do in this area.

Customer and Product Data Bill

The Customer and Product Data Bill is currently before the Select Committee. The Bill, which is part of ongoing financial sector reform, aims to give customers control over their data, enabling innovation and new product development and promoting competition.

See our deep dive report on the Customer and Product Data Bill here.

Banking reform

Following the Commerce Commission’s report into the banking sector, the Government has announced that it will implement the Commission’s recommendations to “disrupt the status quo”. The detail of what regulatory changes might be coming are not finalised – however, as a first step, the Government wants to provide Kiwibank with increased access to capital as a way of boosting its ability to compete.

The Government also expects to see banks invest in innovation and accelerate the development of open banking and give customers more choice (for more on this see our report on the Customer and Product Data Bill referred to above). The Minister of Finance, Nicola Willis, has said that she is putting the “big banks on notice” and has left the door open to take further action if not enough progress is achieved by the sector alone.

We will continue to monitor any changes in consumer law in 2025. If you have any questions about anything discussed in this article, please get in touch with our team.

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