Fair Trading Act Rules For Online Courses In NZ

Are you wondering what the Fair Trading Act rules for online courses actually mean for your sales page? The answer is that you can absolutely promote your course with confidence, but your claims need to be honest, clear and backed up by evidence.

Online courses are often sold with big promises: more income, better skills, faster systems, business growth or a new career path. That kind of marketing can work well, but it also attracts legal risk if the outcome you advertise isn't realistic for the average customer.

The good news is that this doesn't have to be complicated. If your sales page, testimonials, pricing, countdown timers and refund terms reflect what you're genuinely offering, you're already on the right track.

Does The Fair Trading Act Apply To My Online Course?

Yes, the Fair Trading Act 1986 applies if you're selling online courses in trade in New Zealand. That includes self-paced courses, group programmes, paid webinars, templates, memberships, coaching packages and online communities.

The Fair Trading Act is the main New Zealand law that deals with misleading or deceptive conduct in business. It's enforced by the Commerce Commission and can apply to what you say on your website, landing pages, ads, emails, social media posts, webinars and checkout pages.

For online course sellers, the key rules are that you must not:

• mislead customers about what the course includes
• make false claims about results, income, qualifications or demand
• use testimonials in a way that gives the wrong impression
• advertise prices, discounts or payment plans in a misleading way
• make claims unless you have reasonable grounds for them at the time you make them
• use unfair terms in standard form consumer contracts

The Act can apply whether you sell to consumers or other businesses under your customer contracts. Some extra rules, such as the Consumer Guarantees Act 1993, are especially relevant when you're selling to individual customers for personal use.

If your business is based overseas but you're actively selling to New Zealand customers, New Zealand consumer law may still matter. If you're based in New Zealand and selling internationally, you may also need to think about overseas rules in your target markets.

What Can I Say On My Sales Page?

You can say persuasive things on your sales page, as long as they're accurate, balanced and supported by what your course actually delivers. The law doesn't stop you from marketing well, but it does expect you to tell the full picture where leaving something out would mislead customers.

A good sales page for an online course should clearly explain:

• what the course teaches and what services customers receive
• who the course is designed for
• whether customers need prior experience, tools or software
• how long customers will have access
• whether support, feedback or online coaching is included
• whether the course is live, recorded or both
• what customers do and don't receive for the price
• any conditions on bonuses, certificates or community access

Say Mia sells a $1,200 online course that teaches freelancers how to package their services. Her sales page says, Build a clearer offer and learn how to pitch it to better-fit clients. That's likely to be safer than saying, Replace your full-time salary in 30 days, unless Mia has strong evidence that customers generally achieve that result.

The same applies to vague but powerful phrases like guaranteed clients, proven system, certified expert or industry recognised qualification. If those words create a specific impression, you need to be able to back that impression up.

Small Details Can Change The Overall Impression

A claim can be misleading even if each sentence is technically true. The question is often about the overall impression your marketing creates.

For example, if your landing page says Only 2 hours a week but most customers need 8 hours a week to complete the work properly, that could be misleading. If you say lifetime access but later close the platform after 12 months, that could also create problems unless the limitation was clear from the start.

If you're not sure whether a statement is too strong, ask yourself: would a reasonable customer make a buying decision based on this? If the answer is yes, make sure the statement is clear, specific and supported.

Can I Make Income Or Results Claims?

Yes, you can make income or results claims, but only if they aren't misleading and you have reasonable grounds for them. This is one of the highest-risk areas for online course businesses.

Under the Fair Trading Act, businesses can get into trouble for false or misleading claims and for unsubstantiated representations. That means you should have evidence before you make the claim, not after someone challenges it.

Income claims might include statements like:

• Our students earn an extra $5,000 per month
• This course helped 80% of graduates leave their jobs
• Use this strategy to land high-paying clients
• Turn your knowledge into a six-figure business

Those claims may be allowed if they're true, representative and properly explained. The issue is that income results usually depend on the customer's skills, effort, time, market, pricing and existing audience. If your best students had years of experience or large followings, you shouldn't present their outcomes as typical for a beginner.

Safer income and results marketing often includes:

• using accurate data from a meaningful sample of customers
• explaining the time period the result relates to
• making clear whether the result is revenue, profit or gross sales
• avoiding cherry-picked success stories as if they're normal outcomes
• being clear about effort, experience or resources needed
• avoiding guarantees unless you're genuinely prepared to honour them

A disclaimer can help add context, but it won't fix a misleading headline. If the large text says Make $10k A Month and the fine print says results not typical, the overall message may still be risky.

Can I Use Testimonials, Reviews And Screenshots?

Yes, you can use testimonials, reviews and screenshots if they're genuine, current and not presented in a misleading way. Testimonials are powerful because customers trust other customers, so they need to be handled carefully.

Before using a testimonial, you should check that:

• the person actually gave the review
• you have permission to use their name, image, business name or screenshot
• the testimonial reflects their real experience
• you haven't edited it in a way that changes its meaning
• the result isn't presented as typical if it's unusual
• any incentive, payment or affiliate relationship is clearly disclosed

For example, if a student posts in your private community, I made my first sale today!, you shouldn't turn that into a public ad saying Students are making sales immediately unless that broader statement is true and supported.

If you use influencers, affiliates or brand partners to promote your course, they also need to be clear when content is sponsored or when they receive a commission. The Fair Trading Act can apply to the impression created by those promotions, and advertising standards may also be relevant.

Privacy matters too. Under the Privacy Act 2020, you should be careful with personal information, photos, screenshots and case studies. Get clear consent before sharing customer details, especially if the testimonial reveals income, health, education, career or business information.

Are Scarcity Tactics And Countdown Timers Allowed?

Yes, scarcity tactics are allowed if the scarcity is real. Problems arise when a sales page creates false urgency to pressure customers into buying.

Common scarcity tactics include:

• countdown timers
• limited seats
• doors closing dates
• early-bird pricing
• bonus expiry dates
• limited coaching or feedback places

These can be legitimate. If you run a live cohort and you only have 25 places because you personally review assignments, saying 25 places available is fine. If enrolments genuinely close on Friday because the programme starts Monday, a countdown timer can be appropriate.

Where businesses get into trouble is when the scarcity isn't true. For example:

• a countdown timer resets every time someone refreshes the page
• you say there are 3 places left when there's no cap
• you advertise a final chance sale every week
• you say bonuses expire tonight but keep offering them privately
• you suggest a price will rise when you already know it won't

Evergreen funnels need special care. If your automated webinar says doors close tonight, but customers can join at the same price tomorrow using the same funnel, that could be misleading. A safer approach is to describe the real condition, such as a genuine promotional period, cohort deadline or limited bonus that actually ends.

What Are The Refund Rules For Online Courses?

It depends on why the customer wants a refund. You don't always have to offer change-of-mind refunds, but you can't use a refund policy to remove rights customers have under New Zealand consumer law.

Under the Consumer Guarantees Act 1993, services supplied to consumers must be carried out with reasonable care and skill, be fit for a particular purpose the customer made known, and be completed within a reasonable time if no time is agreed. Digital products and course materials can also raise consumer guarantee issues depending on what is supplied.

If your course isn't as described, doesn't provide what you promised, or has a serious issue that can't be fixed, the customer may be entitled to a remedy. Depending on the situation, that could include fixing the problem, providing the missing access or support, or giving a refund.

What you can usually control through your course terms is your change-of-mind policy. For example, you might say:

• there are no refunds if a customer simply changes their mind after getting access
• a 7-day satisfaction guarantee applies if the customer completes certain steps
• refund requests must be made through a particular process
• payment plans remain payable once the customer enrols, unless a consumer law remedy applies

Those terms need to be clear and fair. A blanket statement like no refunds under any circumstances is risky because it suggests customers have no legal rights even when the course is faulty or misrepresented.

If you sell through sales calls, direct messages or webinars after contacting customers first, check whether other rules could apply, including rules for uninvited direct sales in the Fair Trading Act. In some situations, customers may have cancellation rights. The details depend on how the sale was made, so get advice if high-ticket sales calls are part of your model.

What Legal Documents And Settings Should I Have?

You should have clear customer terms and conditions, a privacy policy and compliant marketing settings if you're selling online courses. These documents help customers know what they're buying and help your business avoid messy misunderstandings.

Your online course terms should cover:

• what is included in the course or programme
• payment terms, payment plans and missed payments
• refunds, cancellations and access periods
• course start dates, live session times and replay access
• what support is included and what is not
• rules for communities, comments and acceptable behaviour
• your intellectual property rights and any content licensing rules for videos, templates and materials
• limits on sharing logins, copying materials or reselling content
• what happens if you need to change dates, speakers or platform access

Templates can be a helpful starting point, but they often miss details that matter for online courses, especially if you sell high-ticket programmes, use affiliates, offer payment plans or combine coaching with digital content.

You should also check your terms for unfair contract term risk. The Fair Trading Act rules can apply to standard form consumer contracts and small trade contracts. Terms that let you change the course whenever you like, keep all money in every situation, cancel access without a fair process, or avoid all responsibility may be vulnerable.

If you collect names, emails, payment details, learning progress or community information, the Privacy Act 2020 is relevant. Your privacy policy should explain what personal information you collect, why you collect it, who you share it with and how customers can contact you about it.

If you send promotional emails or text messages, the Unsolicited Electronic Messages Act 2007 also matters. In practice, make sure you have consent, identify your business clearly and include a working unsubscribe facility.

Key Takeaways

• The Fair Trading Act applies to online course marketing, including sales pages, ads, emails, webinars and social media promotions.
• You can make strong claims, but they need to be accurate, properly explained and backed by evidence when you make them.
• Income claims, student results and testimonials are higher risk if they show unusual outcomes without enough context.
• Scarcity tactics like countdown timers, limited places and expiring bonuses are only safe if the scarcity is real.
• Your refund policy can't remove rights customers have under the Consumer Guarantees Act 1993 or the Fair Trading Act.
• Clear course terms, privacy settings and email marketing compliance can protect your business as you grow.

If you'd like help with your online course terms, refund policy, compliant sales pages or privacy documents, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.