by: Danita Ferreira, Partner
1 June 2026
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The Fair Trading Amendment Bill (Bill) proposes significant changes to New Zealand’s consumer protection regime. Introduced on 13 May 2026, the Bill will amend the Fair Trading Act 1986 (Act) to increase penalties for breaches, introduce a new ‘safe harbour’ defence to support proactive scam disruption, and streamline the process for updating product safety demands.
The Bill reflects a policy view that the current penalty regime under the Act is no longer sufficient, particularly for larger businesses. In recent years there has been increasing concern that existing penalties are too low to properly deter misleading conduct, especially where the gains from non-compliance may outweigh the consequences. Public concern around inaccurate pricing and misleading promotions has only sharpened that focus. The Government has indicated that the reforms are intended to ensure that penalties better reflect both the harm caused and any financial benefit obtained from the contravening conduct.
The Bill also responds to the practical realities of modern markets. Online scams are increasingly sophisticated and fast moving, while product safety requirements need to be updated more efficiently to keep pace with changing technical standards. The reforms are therefore aimed not only at stronger deterrence, but also at creating a more responsive and workable enforcement framework.
Increased penalties for Fair Trading Act breaches
One of the most significant aspects of the Bill is the proposed increase in penalties for breaches of the Act. In particular, for companies the penalties would increase from $600,000 per contravention to:
As for individuals, the proposed amendments would see penalties increase from $200,000 to $1 million.
The Bill also proposes to move most breaches from a primarily criminal regime to a civil liability regime, while retaining criminal liability for more serious or intentional misconduct. In practical terms, that may make enforcement more efficient and more flexible. For businesses, the real message is that fair trading compliance is likely to become a more significant legal and commercial risk, particularly in relation to pricing, promotions, advertising claims, and consumer facing conduct.
New ‘safe harbour’ defence for scam disruption
The Bill also proposes a statutory ‘safe harbour’ defence for online service providers that act in good faith to proactively disrupt suspected scam activity. The purpose of the defence is to encourage timely action where there are reasonable grounds to believe online activity is a scam, without exposing providers to civil liability simply because they acted quickly.
The defence would only apply where the provider has reasonable grounds for the belief and where the disruption action is reasonably proportionate, taken in good faith, commenced within the required timeframe, and reversed promptly if those grounds no longer exist.
Although this proposal is directed primarily at online service providers, it also signals a wider regulatory focus on scam-related consumer harm in digital environments.
Changes to product safety regulations
A further reform proposed by the Bill is to streamline the product safety framework under the Act. Under the proposed model, regulations would continue to identify which products are subject to product safety regulation, while the chief executive of the Ministry of Business, Innovation & Employment would be authorised to issue product safety notices setting technical requirements. This is intended to improve the flexibility and timeliness of updating standards as they change over time.
This may be particularly relevant for businesses involved in the supply or importation of regulated consumer goods. Existing product safety standards cover products such as baby walkers, children’s nightwear, children’s toys, cigarette lighters, household cots, multipurpose ladders, pedal bicycles and sunscreen. A more agile framework may help keep New Zealand’s standards aligned with international developments, but it will also require businesses to monitor changes more actively.
Although the Bill is still progressing through the legislative process, it provides a timely prompt for businesses to review their current compliance settings. In particular, businesses should be considering whether:
Businesses operating in digital channels should also consider whether they have appropriate processes in place to respond to scam related risks, impersonation, or misleading online conduct.
For suppliers and importers of regulated goods, there is also a clear need to ensure product safety compliance systems are capable of responding to technical changes efficiently.
The direction of travel is clear. The Bill is intended to strengthen deterrence, modernise enforcement, and create a more responsive consumer protection regime. Businesses that review their practices now will be better placed to manage risk and prepare for the proposed changes if and when they come into force.
If your business needs assistance with reviewing existing practices, please get in touch with Wynn Williams’ experienced team.
Danita Ferreira, Partner – Wynn Williams Consumer Markets team
Roxana Cvasniuc, Associate – Wynn Williams Consumer Markets team
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