Fair Trading Act changes
The Government is amending the penalties for breaching the Fair Trading Act 1986 to provide a strong deterrent for unfair and misleading conduct, and making changes to enable product safety standards to be kept up to date. These changes aim to better protect consumers and provide businesses that trade fairly with a level playing field.
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About the Fair Trading Act
The Fair Trading Act protects everyone in New Zealand from unfair trading practices and covers everything from ensuring that pricing isn’t misleading through to prohibiting pyramid schemes.
The Act prohibits businesses and individuals in trade from being misleading about their products or services, with penalties for those who breach the law. This 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 what’s charged at checkout. The Act also deals with unfair contract terms and has specific requirements for certain types of sales conduct like uninvited sales and auctions.
New penalties
In October 2025, the Government decided to increase the maximum penalties for breaches of the Fair Trading Act:
- Penalties for breaching most provisions, including misleading and deceptive practices, will increase from a maximum of $200,000 for individuals and $600,000 for body corporates to the greater of:
- $1 million for individuals or $5 million 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 management bans will increase from $60,000 to $200,000.
- Maximum penalties for breaching consumer information requirements, consumer transaction rules, and impeding enforcement will all increase from $10,000 to $60,000 for individuals and from $30,000 to $200,000 for body corporates.
- Most breaches will move from a criminal liability regime to a civil liability regime. Conduct that is serious or deliberate will remain criminal offences – such as demanding payment without intending to supply, 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 Fair Trading Act – including the nature of the conduct, whether the firm has breached the Act before, and the size and scale of the firm and the breach it made.
Product safety standard changes
The Government is delegating the role of updating product safety standards to MBIE. When new versions of standards become available, MBIE will be able to update existing product safety standards. This will help ensure product safety standards are kept up to date.
This change applies to updates to New Zealand’s existing product safety standards that cover:
- Baby walkers
- Children’s nightwear
- Children’s toys
- Cigarette lighters
- Household cots
- Multipurpose ladders
- Pedal bicycles
- Sunscreen.
Any new standards will still require Government approval when they are first adopted.
Timeline for changes
Legislation to amend the Fair Trading Act is to be introduced to Parliament in early 2026. The changes are expected to become law later in 2026. The penalty changes will not apply to any cases currently before the courts.
Related documents
Worked examples of how the new penalties regime will work in practice.
Fair Trading Act Penalties Amendments: Worked examples [PDF, 69 KB]
The Cabinet paper and other material about these changes will be proactively released in due course.