Mathers Mojo: Consumer Law Reform Bill — In CommitteeText is incorporated into the Bound VolumeMathers Mojo: Consumer Law Reform Bill — In Committee[Sitting date: 03 December 2013. Volume:695;Page:15178. Text is incorporated into the Bound Volume.]MOJO MATHERS (Green): I am extremely pleased that finally the Consumer Law Reform Bill is coming before the Committee. It is a bill that is long overdue to modernise consumer protection law in New Zealand. It would be fantastic if it could get passed before Christmas especially when so much spending is going on in New Zealand.The Green Party is particularly pleased to see the unsubstantiated representation clause in the bill. At the moment we have lots of products that are increasingly trying to jump on the “greenwash” bandwagon and that make all sorts of claims about how they will be clean and green reduce the impact on the environment be environmentally responsible and so on. By and large consumers are very trusting. If a company makes that claim about its product then consumers will often believe that that is the case—that that product is better than other products on the market and will have a lower environmental footprint—and therefore if they care about these issues as many do they will choose to buy that product. It is extremely difficult to prove that those companies are making a false claim and it can be costly and ineffective so not many of them actually get taken to task for making such a claim even though they are profiting from making these claims especially when they are unsubstantiated. So it is fantastic to see that the bill has a clause that will finally address that by placing the onus of proof on the company making the claim to prove that it has some evidence to back that claim that it is making. It is a very simple straightforward expectation that you do not make a claim unless you actually have some evidence for that claim.Consumer New Zealand gave a very powerful submission to the Commerce Committee. It tests a lot of products for their claims and it gave the example of a vacuum cleaner system where a $3000 vacuum cleaner was advertised as being a world-class indoor environment management system that reduces asthma and allergies.When Consumer New Zealand actually tested it it found that it performed no better than the $100 product on the market. So people were paying basically $2900 more for a product on the basis of its claims which were found to be unsubstantiated and unproved. That is the kind of thing we do not want to see happening. It puts honest traders honest companies at a severe disadvantage. It is fantastic that finally we have a law that places the onus of proof to back the claim on to the company making the claim.It was quite extraordinary at the select committee to see the number of large companies submitting against this bill. The committee came under a lot of pressure. Power companies wine-growing companies all sorts of companies said: “No no no don’t make us prove that our claims are actually based on fact.” I want to congratulate the select committee members on withstanding that fairly obvious hypocrisy on staying on the side of consumers and consumers’ rights to be protected and on retaining that clause. However the select committee did recognise that there is a case where sometimes claims are made that are so fanciful that they are obviously untrue and that this is just a sort of marketing ploy that could be used to say: “Oh if you consume this product it will make you a superhero.” or something like that and suggested a clause in the bill that allows obviously exaggerated claims to continue to be made.We are also very glad that the Commerce Commission has got additional powers to enforce notices—investigation powers. One of the concerns that I did have after the select committee hearing was that there is no clause in the bill to allow substantiation notices such as they have in Australia. So we wrote to the Commerce Commission to ask whether it would find having powers to issue substantiation notices helpful in enforcing the clause around unsubstantiated representation. It wrote back saying that it had originally sought these provisions but it now thinks that the substantiation provisions in this bill are actually going to be workable because they are simpler they are more easily enforceable and they provide a better education tool. The commission is confident that it has sufficient powers under this bill as it stands particularly in conjunction with the information-gathering powers it has. Because of this letter from the Commerce Commission we are hopeful that this bill will work as intended and that it does have the powers to enforce unsubstantiated representation effectively.The other part of the bill that we are incredibly pleased to see is the fact that for the first time online traders will be required to identify themselves as such. In the past very often if you were on an auction site such as TradeMe and so on it was not always clear whether the person selling the product was in trade or not. Of course it is only when someone is in trade that the protections of the Consumer Guarantees Act come into play. It is incredibly important from the consumer perspective that they know when someone is in trade when they are purchasing something from someone. Again this was a clause that was strongly resisted by a lot of groups and auctioneers in particular—traders who use the online website for auctions. I am very pleased to see that this has been retained because people do not realise the difference when they are going online. It is fantastic to see that consumers are now going to be properly protected whenever they are purchasing from a trader whether that is online or off-line at any kinds of venue. They will be protected under the Consumer Guarantees Act and that is a great move forward.