Elements Of Misleading Or Deceptive Conduct In New Zealand Law

If you’re running a small business, your marketing and sales process is probably moving fast. You’re writing website copy, posting on social media, responding to enquiries, sending quotes, and closing deals.

But there’s a legal line you can’t cross: misleading or deceptive conduct in New Zealand can expose your business to complaints, refunds, disputes, and serious consequences - even if you didn’t mean to mislead anyone.

The good news is that most issues are preventable once you understand what the law is actually looking at. In this guide, we’ll break down the key elements of misleading or deceptive conduct under New Zealand law, what common small business scenarios look like, and practical steps you can take to stay compliant (without watering down your marketing).

What Does “Misleading Or Deceptive Conduct” Mean In New Zealand?

In New Zealand, the phrase “misleading or deceptive conduct” is most commonly linked to the Fair Trading Act 1986 (FTA). The FTA is the main law that regulates how businesses advertise, promote, and sell goods and services.

In plain terms, the FTA aims to make sure businesses don’t:

• mislead customers (whether intentionally or not);
• create a false impression through what they say or what they leave out (where the context means something should be disclosed); or
• use marketing tactics that are likely to confuse people about price, quality, characteristics, availability, endorsements, or key terms.

This is why misleading or deceptive conduct is a big deal for small businesses - it can come up in everyday situations like:

• a website claim about results (“guaranteed to double your sales”);
• a price displayed online that excludes compulsory fees;
• an “in stock” representation when you can’t actually supply in a reasonable time; or
• a sales pitch where the customer walks away with the wrong impression about what they’re buying.

And importantly: you can breach the law even if you honestly believed what you said was true.

What Are The Core Elements Of Misleading Or Deceptive Conduct?

To understand how risk shows up in the real world, it helps to break misleading or deceptive conduct into a few core “elements” (in everyday language). A court will typically focus on the overall impression created and whether that impression is likely to mislead.

1. The Conduct Must Be “In Trade”

The Fair Trading Act applies when the conduct happens in trade - meaning it’s connected to business activity.

That can include:

• advertising and marketing;
• sales conversations and negotiations;
• website and social media claims;
• product packaging and labelling;
• quotes, proposals, and invoices; and
• communications through your staff or contractors on your behalf.

If you’re a business owner promoting, quoting, or selling goods/services, you’re almost certainly operating “in trade”.

2. It Can Be Words, Images, Silence, Or “The Overall Impression”

Misleading conduct isn’t limited to direct statements. It can be created by:

• what you say (e.g. “this includes ongoing support”);
• what you show (e.g. before/after images, diagrams, “mockups”);
• what you don’t say (e.g. failing to disclose key exclusions or extra costs, where a reasonable customer would expect that information); or
• how the whole offer is presented (layout, fine print placement, headlines).

This is why “fine print” doesn’t automatically save you. If the headline or main message creates a strong impression, small disclaimers that don’t clearly correct that impression may not protect you.

3. It Must Be “Misleading Or Deceptive” (Or Likely To Be)

The focus is usually on whether the conduct is:

• actually misleading; or
• likely to mislead or deceive.

You don’t always need proof that someone was misled - the risk can be triggered by the likelihood that an ordinary customer in the target audience would be misled.

That also means you need to think about who your marketing is aimed at. A technical B2B audience might interpret a statement differently than an everyday consumer.

4. Intention Often Doesn’t Matter

This is one of the most surprising parts for business owners.

You might think: “But I didn’t mean to mislead anyone.” Under the Fair Trading Act, lack of intention doesn’t necessarily avoid liability.

So if your website copywriter made an overconfident claim, or a staff member “oversold” something during a phone call, you could still be exposed - because the law is largely about the effect of the conduct, not your mindset.

5. There’s Often A Connection To Reliance And Loss (But Not Always)

In many real disputes, a customer claims they relied on a representation and suffered loss (paid money, wasted time, or made a purchase they wouldn’t otherwise have made).

However, Commerce Commission enforcement can still happen even where an individual customer’s “loss” isn’t neatly proven (for example, where advertising is misleading at scale). The Commerce Commission can take action to protect the market generally.

Common Examples For Small Businesses (And Why They’re Risky)

Most small businesses aren’t trying to trick anyone - but misleading or deceptive conduct often shows up in day-to-day operations.

Pricing And “Hidden Costs”

Pricing issues are one of the most common sources of risk.

Examples include:

• advertising a price that doesn’t include unavoidable fees;
• adding compulsory “admin” or “service” fees later in checkout;
• using “from $X” when almost nobody can actually get the product/service for that price; or
• claiming a discount that isn’t genuine.

A helpful habit is to sanity-check whether a customer could reasonably believe the displayed price is what they will actually pay.

Availability, Lead Times, And Stock Claims

If you advertise “in stock”, “ready to ship”, or “delivery in 24 hours”, you need to be confident you can meet that in normal circumstances.

If your supply chain is unpredictable, it may be safer to describe timeframes as estimates and clearly explain what causes delays. Your business day definitions also matter here - customers can interpret “3 business days” very differently if you haven’t set expectations clearly.

Performance And Results Claims

Statements like “guaranteed results”, “will increase revenue”, or “proven to get you hired” can be risky unless you can substantiate them.

As a rule of thumb, if you’re making a strong claim, ask yourself:

• Do we have evidence to back this up?
• Is it true for most customers - or only best-case scenarios?
• Do we need clear conditions or qualifications near the claim?

Misleading Testimonials Or Endorsements

Testimonials can be great marketing - but they need to be genuine and not misleading in context.

Be careful with:

• using testimonials that aren’t from real customers;
• editing testimonials in a way that changes meaning;
• implying an endorsement from a person/organisation that hasn’t endorsed you; or
• showing results that aren’t typical without making that clear.

Silence About Important Limitations

Sometimes what gets businesses into trouble isn’t a false statement - it’s missing information that would change the customer’s decision.

This comes up a lot where:

• a service has key exclusions (e.g. “support” is only email support, not phone);
• a product has compatibility limitations; or
• a “package” doesn’t include essentials that customers reasonably expect.

Whether silence is misleading depends heavily on context (including what you’ve said already and what a reasonable customer would expect to be told). If your offer needs careful framing, it’s often worth putting clear terms in place upfront. For example, online businesses often rely on solid Terms & Conditions to set boundaries around what’s included, payment, delivery, cancellations, and limitations.

How Misleading Conduct Can Happen In Quotes, Contracts, And Negotiations

Marketing isn’t the only danger zone. A lot of misleading or deceptive conduct disputes start during the sales process - especially when things are agreed quickly via email or phone.

Is A Quote Legally Binding?

Yes, a quote can be legally binding in certain circumstances, depending on how it’s presented and accepted. If the quote contains incorrect or ambiguous information and the customer relies on it, that can create both contractual and Fair Trading Act risk.

If quoting is a big part of your business, it’s worth understanding the basics of whether a quotation is legally binding and making sure your quoting documents are consistent and carefully worded.

Unclear Scope = Higher Risk

Here’s a common scenario:

You’re pitching a service package. You tell the client “we’ll handle the whole build”. The client assumes that includes copywriting, SEO, and ongoing maintenance. You intended “build” to mean design + development only.

No one is trying to be dishonest here - but the mismatch in expectations can quickly become a claim that the sales process was misleading.

This is why strong written agreements matter. Depending on what you’re selling, you might use a tailored Service Agreement (for project-based work) or a set of customer-facing terms that are easy for clients to understand before they pay.

Representations Made By Staff Or Contractors

Your business can be responsible for what your staff (or contractors acting for you) say to customers.

If you’ve hired someone to do sales or customer success, make sure they:

• understand what they can and can’t promise;
• know how to describe limitations honestly; and
• have a script or checklist for key disclaimers that must be raised.

If you’re building out a team, it’s also important to have clear documents in place like an Employment Contract (or contractor agreements) so roles, authority, and expectations are documented properly.

What Are The Risks And Penalties For Misleading Or Deceptive Conduct?

There are a few different “levels” of consequence, depending on the seriousness of the conduct, which sections of the Fair Trading Act are involved, and whether it affects one customer or many.

Customer Disputes And Refund Demands

Often, a misleading conduct issue begins with a customer asking for:

• a refund;
• a discount or compensation;
• to cancel a contract; or
• you to re-do work at your cost.

Even if the amount is small, these disputes take time, distract you from running the business, and can escalate quickly (especially if there are online reviews involved).

Commerce Commission Investigations

The Commerce Commission enforces the Fair Trading Act and can investigate business conduct that looks misleading. This can involve requests for information, documents, and explanations of marketing claims. In some cases, the Commission may also accept enforceable undertakings or require changes to advertising and sales practices.

Court Orders, Damages, And (In Some Cases) Fines

Where matters go further, consequences can include:

• court orders (for example, injunctions stopping certain advertising or requiring corrective advertising);
• civil claims by customers or other businesses seeking damages/compensation (and sometimes other remedies such as cancelling or varying a contract, depending on the circumstances); and
• financial penalties in cases where the conduct falls within provisions of the Fair Trading Act that attract pecuniary penalties (for example, certain false or misleading representations).

Even if you ultimately resolve the issue, the cost in management time, stress, and lost customer trust can be substantial.

How Do You Reduce Your Risk? A Practical Compliance Checklist

Most businesses don’t need “perfect” marketing - they need clear, supportable marketing. Here are practical steps you can take to reduce your risk of misleading or deceptive conduct in New Zealand.

1. Audit Your Most Visible Claims

Start with your highest-traffic areas:

• homepage headlines;
• pricing pages;
• product descriptions;
• social media bios and pinned posts;
• Google ads or paid social copy; and
• sales decks and email templates.

Ask: “Could a reasonable customer walk away with the wrong impression?”

2. Substantiate Performance Claims

If you’re claiming results, make sure you have evidence. That might be:

• internal testing;
• supplier documentation;
• customer data (careful with privacy);
• case studies (accurate and representative); or
• industry benchmarks.

Be cautious about using absolute words like “guaranteed”, “always”, “best”, or “number one” unless you can prove them.

3. Make The Key Terms Easy To Find (And Match Your Marketing)

Terms can’t just exist - they need to align with your advertising and sales messaging.

If your business collects customer data through enquiries, online orders, or email marketing, you should also consider whether you need a Privacy Policy to set clear expectations about how information is collected and used.

4. Be Consistent Across Channels

A common trap is inconsistency:

• your Instagram post says “free shipping”,
• your website says “free shipping over $80”, and
• your checkout applies a shipping fee to rural areas.

Even if each statement is “sort of” true, the combined impression can be misleading. Pick one accurate position and apply it everywhere.

5. Train Your Team On What They Can Promise

Misleading conduct isn’t just a marketing issue - it’s a people issue too.

Give staff a simple guide to follow, such as:

• what’s included / not included in each package;
• lead times they can quote;
• refund/cancellation rules; and
• when they should escalate questions to you.

6. Use Clear Written Agreements For Sales

If you’re doing custom work, recurring services, or higher-value jobs, don’t rely on a casual email thread.

A properly drafted agreement helps because it:

• reduces misunderstandings about scope and deliverables;
• sets payment terms and consequences for late payment;
• clarifies limitations and responsibilities; and
• creates a single “source of truth” if there’s a dispute.

For many small businesses, a tailored Contract Review is a good way to pressure-test your current documents and identify risky wording before it causes problems.

Key Takeaways

• Misleading or deceptive conduct in New Zealand is primarily regulated under the Fair Trading Act 1986, and it applies broadly to business advertising and sales activity.
• You can be at risk even if you didn’t intend to mislead - the law focuses heavily on the overall impression created for your target audience.
• Misleading conduct can happen through what you say, what you show, or (in context) what you leave out - and “fine print” won’t always fix a misleading headline.
• High-risk areas for small businesses include pricing displays, “in stock” claims, delivery timeframes, performance/results claims, and unclear service scope during quoting.
• Strong customer-facing terms and tailored agreements can reduce disputes by setting expectations clearly and consistently from day one.
• A quick compliance audit of your website, ads, and quoting process is one of the simplest ways to reduce the risk of complaints, refunds, and enforcement action.

Need help? If you’d like help reviewing your marketing claims, customer terms, or sales contracts to reduce your risk of misleading or deceptive conduct, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.

Note: This article is general information only and doesn’t take into account your specific circumstances. It isn’t legal advice.