Consumer law without enforcement is just campaign stationery

Labour’s Fair Go Law is a good list of grievances. It would ban junk add-ons on car insurance, unclear automatic subscription renewals, punitive exit fees and the gym-style notice periods that keep customers paying long after they have stopped turning up. Nobody running an honest business should object to any of it.

The problem is what the pledge leaves out. New Zealand already has decent consumer law. What it lacks is a regulator funded to police it and penalties large enough to change a boardroom’s arithmetic. New prohibitions without either will change the paperwork, not the behaviour.

The rules are not the bottleneck

The proposal has had a warm reception. Consumer NZ advocacy director Sam Duffy says it is “great to see it emerge as part of a major political party’s manifesto”, while arguing Labour could go further with an Australian-style blanket ban on unfair trading practices.

The sharper response comes from University of Auckland consumer law professor Alex Sims. She backs the policy in principle but warns that many businesses simply ignore existing law because enforcement is weak. “I urge Labour to direct and fund the Commerce Commission to conduct far more active investigations,” she says. That is the gap Newsroom’s analysis also identifies: proposals that will not stop companies breaking them.

Sims also names the moral hazard business owners should care about most. New rules load compliance costs onto firms that already follow the law, while the operators ignoring today’s rules face no greater deterrent tomorrow.

When the fine equals the profit

The case for that scepticism is already on the record. In 2025, Consumer NZ’s then-chief executive Jon Duffy pointed to Pak’nSave, which made $70,000 from misleading customers after a prior Commerce Commission warning for the same conduct, and was fined $70,000 against a $600,000 maximum. He called penalties “woefully low compared to other jurisdictions” and noted fewer than five unfair contract terms cases had reached the courts.

A fine that merely returns the gain is not a penalty. It is a refund with legal fees attached.

Enforcement has picked up at the margins. In March 2026 the Commerce Commission filed its first unconscionable conduct prosecutions against The TV Shop and HouseSmile, with deputy chair Anne Callinan describing the alleged high-pressure tactics as “some of the worst we have seen”. Maximum fines there were $600,000 for companies.

The follow-through is patchy too. Figure.NZ data released in March 2026 showed 319 convictions for deceptive business practices in 2025, against 189 withdrawn charges, roughly a third of the 550 recorded outcomes.

The public already suspects the rules don’t bite

Consumers noticed long before the politicians did. MBIE’s 2022 consumer survey found only 34% agreed misleading conduct laws were adequately enforced. In the 2024 survey, 26% reported being misled by a business in the previous two years, and just 38% of those with problems were satisfied with the outcome. Only 17% contacted a dispute resolution service. Rights that nobody uses are not much of a deterrent.

The Government is already fixing the harder part

To be fair to both sides, the penalty problem is not Labour’s discovery. BusinessDesk reports the Government is overhauling Fair Trading Act penalties precisely because fines have become a cost of doing business. Its Fair Trading Amendment Bill, approved by Cabinet, shifts most breaches to civil liability with tiered penalties modelled on financial markets law.

That is the more consequential reform, and it carries its own risks. BusinessNZ supports tougher deterrence for deliberate deception but warns that “system generated errors are an unavoidable feature of operating complex businesses at scale” and should not be punished as misconduct. The Bar Association goes further, arguing the consultation offered no evidence that current penalties fail to deter, and that penalties must be “proportionate to the seriousness of the conduct”.

Those are fair points. Big fines aimed at billing glitches would punish the competent. But they argue for targeted enforcement, not for none.

What business should actually watch

For compliant firms, the Fair Go Law means another layer of specific rules to build around: cancellation flows, add-on disclosure, contract term reviews. That cost is real and lands first on the businesses already doing the right thing.

The test for Labour is simple. Does the pledge come with money for Commerce Commission investigators and prosecutors, and does it commit to keeping the Government’s higher civil penalties? If not, the operators who treat a $70,000 fine as a line item will carry on, and the honest ones will pay for the new stationery.

The better contest this election would be over who funds the cop, not who writes the longer rulebook.

Sources

• Newsroom: Labour’s consumer law proposals won’t stop companies breaking them (2026-10-06)
• The Post: Labour’s planned consumer protection laws must be backed by a properly funded regulator, professor warns (2026-10-04)
• NZ Herald: Analysts supportive of Labour’s Fair Go proposal but question specifics (2026-10-03)
• The Post: Consumer NZ urges Government not to back down on fair trading reforms (2025-10-06)
• Newsroom: Unconscionable conduct, enforcement gets underway (2026-03-02)
• Figure.NZ: Adults charged with deceptive business practices in New Zealand (2026-03)
• Commerce Commission and MBIE: NZ Consumer Survey 2024 (2024-07)
• BusinessDesk: Fair Trading penalties face overhaul, ‘cost of doing business’ (2026-09-03)
• BusinessNZ: Fair Trading Amendment Bill submission (2026-07-16)
• NZ Bar Association: Submission on amendments to the Fair Trading Act 1986 (2026-08-08)