The Fair Trading Amendment Bill (the Bill) has been referred to select committee, with submissions due by 16 July 2026.
The headline-grabbing change is a significant increase in maximum penalties under the Fair Trading Act. The maximum penalty for conduct like false or misleading representations will increase from NZ$600,000 for companies / NZ$200,000 for individuals, to the greater of:
- NZ$5m (for companies) / NZ$1m (for individuals)
- Three times the amount of the gain made or loss avoided by the person in breach
- The value of the consideration for the relevant transaction(s).
The Bill also proposes a shift from the current criminal enforcement regime to a civil liability regime for key prohibitions like unconscionable conduct, misleading conduct and representations, unsubstantiated representations, unfair contract terms and bait advertising. This will mean that many breaches will no longer involve a criminal conviction – but the civil standard of proof (balance of probabilities) may make it easier for the Commerce Commission to establish liability. Some provisions, like compliance with product safety standards and pyramid selling schemes, will remain criminal offence provisions.
The Commerce Commission has been pushing for higher penalties for some time to address concerns that fines have become a 'cost of doing business' for some. That said, the new caps remain well below maximum penalties in Australia (the greater of AU$100m, the value of the benefit obtained, or 30% of turnover).
The Bill also proposes:
- Scam safe harbour defence: A new statutory defence for online service providers who remove content when they have reasonable grounds to believe that scam activity is occurring – to address concerns about legal risk if legitimate content is removed in error
- Streamlining product safety framework: A new power for the Ministry of Business, Innovation and Employment to issue product safety notices to specify or update product safety standards required to be complied with under regulations – enabling faster updates as standards evolve.
The select committee is due to report back by 27 November 2026 before the Bill goes through the remaining Parliamentary stages. Penalty changes are proposed to take effect six months after the Bill is passed – so likely not until mid-2027 at the earliest.
In the meantime, Commerce Commission scrutiny of Fair Trading Act issues continues, making this a timely prompt to review your consumer law compliance programme.
If you have questions about the Bill or want to submit, please contact a member of our consumer law team.
