The Fair Trading Amendment Bill (the Bill) seeks to significantly raise the stakes for businesses. If enacted in its current form, it would give the Commerce Commission a more effective enforcement toolkit and materially increase the consequences of failing to comply with the Fair Trading Act.
Increased Penalty Maximums
The Bill introduces a two-tier civil penalty regime. Broadly, the more serious trading prohibitions sit in Tier 1, while more technical disclosure and compliance obligations sit in Tier 2.
Tier 1 includes unconscionable conduct, misleading conduct in relation to goods, services and employment, unsubstantiated representations, false or misleading representations, bait advertising, and unfair contract terms. Under the new regime, the maximum pecuniary penalty for these kinds of breaches (amongst others) would be the greater of:
- the consideration for the relevant transaction;
- three times the gain made or loss avoided, if that can be readily ascertained; or
- $1 million for an individual or $5 million for organisations.
Tier 2 covers a range of consumer-facing disclosure and process obligations, including those relating to consumer information standards, parts of the layby regime, extended warranty disclosure, and gift card expiry rules. Under the new regime the maximum penalties for these breaches would increase to $60,000 for an individual and $200,000 for organisations (up from $10,000 and $30,000 per offence respectively).
Not all contraventions would move to civil enforcement. Criminal liability would remain for a narrower set of conduct, including taking payment without intending to supply, pyramid selling, and serious product safety breaches. For the most serious offence provisions, maximum fines mirror the higher civil penalties.
A new civil liability regime
The Bill’s significance lies not just in higher penalties, but in how breaches will be enforced. For most listed contraventions, the Commission will be able to seek civil remedies including declarations, compensation, injunctions and pecuniary penalties. The Commission will take proceedings alleging civil standard (balance of probabilities) rather than the higher criminal standard of beyond reasonable doubt.
Safe harbour for proactive scam disruption
The Bill also aims to support faster scam disruption by giving online service providers a conditional defence to civil liability where they take timely steps to disrupt suspected scam activity.
Next steps
The Bill was introduced on 13 May and was yesterday referred to the Finance and Expenditure committee following its first reading. With parliament set to dissolve on 1 October ahead of this year’s general election on 7 November, it is uncertain whether the Bill will be passed into law in 2026.
What businesses should do now
Businesses should start preparing now by:
- reviewing customer-facing advertising, pricing and sales practices for general compliance with the Fair Trading Act;
- checking standard form contracts and disclosure processes;
- for online services providers, ensure scam identification and response processes can support fast, documented decisions; and
- ensuring directors and senior management understand the increased enforcement and penalty risk.
If you have any questions about the Fair Trading Amendment Bill or your obligations under the Fair Trading Act, please get in touch with our Corporate and Commercial team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
