Your Business, AND The NZ Fair Trading and Consumer Guarantees Acts
By Christine Walter, ANZCAL
Coaching, any type of coaching, is unlegislated in New Zealand.
As such we are therefore the custodians of our industry – united in maintaining the integrity of how the industry is viewed.
Which Acts Do We Have to Comply To?
Naturally all laws and acts that relate to running a business, employment laws (including being self-employed) and maintaining a healthy and safe environment for you and your clients are required to be complied with. In this article we explore two Acts that you may not have considered yet should know about.
Fair Trading Act
The Fair-Trading Act relates to claims about products and services prior to purchase and during the selling process. We refer to it here in relation to services. If you are also selling products, be sure to research further.
If you are selling a product or service, you are required to apply by this Act. Following are some of the key points to note.
1. Be Able to Substantiate Your Claims:
It is important that you can substantiate your claims so be careful with what you declare. This includes making false claims, unsubstantiated claims or being misleading or deceptive. We have read several reports across a variety of products and services where the advertising claim is not the case in fact once purchased.
Be prepared to present supporting research to any claims you make e.g. “Fasting guarantees a 70% quicker way to lose unwanted weight” (I made that up by the way) – what evidence could you produce if you made this claim?
We highly recommend that you have a disclaimer on your marketing. This should be placed where it can be seen and in a readable font and font size. Of course, this does not mean you can make radical claims in your statement just because you have a disclaimer at the bottom!
2. Avoid Unfair Practices:
These relate to purchase incentives.
- If you are going to offer a prize or a give-away you must see deliver on this offer. If “sign up now and go in the draw to win an all expenses paid trip around the world” – some must win the prize and as it is promoted. You couldn’t then provide a book of “Around the World in 80 Days” to the winner.
- If you offer a special price – this too must be honoured. If there is a restriction on number of people that can purchase at this price it must be stated and can be verified.
- Offering a service or product and not intending to provide it is prohibited.
- Pyramid selling and scams are naturally off the table.
- Avoid harassing, coercing or bullying tactics to get a purchase.
Whether there is an agreement or not your and your client are entering a contract for a service. We believe that a formal written agreement is best practice. These need to be fair to both you and the client.
3. Quotes and Estimates
All quotes and estimates should be as accurate as possible. A quote is when you offer to complete the service at the price you note. This is to be honoured if the client accepts.
An estimate is an estimation of cost using your most recent costings as the basis. Any reasonable variation on the estimate (Consumer NZ recommends anything 20% or higher as a reasonable variation) the client should be notified at the earliest possible opportunity.
If your offer excludes GST this must be clearly noted. By not doing so your client can challenge the pricing. If you are purchasing a product or service and it is not clear whether GST is included or not, be sure to ask before making a commitment. This simple check can resolve many possible problems before they arise.
If you will charge your client for any debt collection fees or late payment fees, this should be noted at time of purchase, so they are fully aware of this.
4. Mistakes in Pricing
These can happen and if genuine you do not have to sell at the advertised price. Be wary of making pricing mistakes often though as this could be construed as an unfair practice.
5. Making a Price Comparison
If you are making a price comparison it should be against actual market pricing. To say the person makes a saving of $99 yet last week it could have been purchased for only $20 over your special pricing is not a fair market comparison. In a Consumer Review we read, the Commerce Commission acknowledges 30 days as being a fair-trading period for comparison.
There is more to this Act relating to products and each of these points. We strongly encourage that you make yourself aware of this Act so that you have a full understanding. Not knowing is not always a good plea for leniency.
Consumer Guarantees Act
This Act covers products and services after their purchase. It is designed to ensure the purchaser receives what they purchase and ensure people who trade provide what is being purchased. We found it interesting to note that it also covers Pop-Up shops, regular online trading as well as standard businesses, providers and even hospitals and schools.
How this Act refers to our services:
1. Service Delivered with Appropriate Skill and Care
Your services must be appropriate to what the client seeks and delivered with care and attention. They are also required to be fit for the purpose intended. What your client receives should match as close as possible to what they have been offered.
As we are unlegislated this is a grey area. Anyone can claim to be a coach or a hypnotherapist and not have done any training or hold certification.
We believe it is important that:
- You can do what you claim to do safely and appropriately. We strongly encourage being a part of a network of skilled and reputable people so that if the person is wanting something out of your area of expertise you have a person you can refer them to. Please always remember the person we are working with is more important than our own ego.
- You hold qualifications appropriate to your service offerings and
- Complete Professional Development regularly (minimum annually) to ensure you are maintaining a good standard of current knowledge.
- You are affiliated with a reputable organisation pertaining to what you offer.
2. Services Are Reasonably Price
What you charge for your service is over to you and remember, price fixing is against the law in New Zealand. The Consumer Guarantees Act does require that your service is offered at a fair and reasonable price.
- It is always great to find out what your marketplace is selling similar services for so do some research.
- When setting pricing think about the psychology of purchasing and what you are offering. Be careful you don’t undersell your services.
3. Services Are Delivered in a Timely Manner
While this is self-explanatory there are a couple of points to consider.
- If, at the time of client booking, you know you will have a period where you are not available, we encourage you to make this clear at this point of contact. We believe it is disingenuous to take the payment and then advise you are not available.
- Lockdowns are a part of our life currently and are unavoidable. If a lockdown is imposed, we strongly encourage communicating promptly with your clients to arrange another time, arrange a virtual meeting or at least, arrange for the appointment to be made promptly upon coming out of lockdown level 3 or 2 – which ever you can safely comply with.
4. Complaints and Remedial Actions
Under this Act you are required to deal with any complaints relating to the Act promptly.
- You have a documented Feedback process that you can provide your client.
- Upon receiving a complaint take the time to listen to the client and find out as much information as possible to ascertain where the conflict is.
- You act swiftly, reasonably and fairly to remedy the problem.
You do not have to offer a remedy if the person:
- got what they asked for but simply changed their mind
- misused or altered a product in any way that caused the problem, eg not following instructions for use
- asked for a service to be done in a certain way against your advice, or was unclear about what they wanted
- took an unreasonable time to return the products or cancel the service
- experienced a service problem that was outside of your control, eg a natural disaster, or was caused by someone you are not responsible for.”
(Direct quote from the CGA website)
As a Last Word
We obviously encourage all service providers to act ethically and with integrity. The ANZCAL Code of Conscience and Conduct is a very good guide to operating your business and conducting yourself.
We strongly encourage all independent service providers and businesses to hold a good quality Public Liability Insurance and Professional Indemnity insurance.
This article is the opinion of the author. Please be sure to complete your own research into all legal requirements relating to your service and business.
Sources for this article:
- What You Must Do For Consumers
- Obligations Under The Consumer Guarantees Act
- Your Obligations as a Business
- Fair Trading Act 1986
- Fair Trade Act – consumer rights – Consumer NZ
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
Christine Walter is passionate about coaching! She is a Master NLP Practitioner and NLP Trainer, Hypnotherapist, Life Coach, Master mBit Coach and mBit Coach Trainer. As well as personal coaching she offers one on one coaching and training courses via her own business Lodestone, and other agencies.
She is a Founding Director of Australia and New Zealand Coaching Alliance.