5 Unfair Business Practices To Avoid In New Zealand (2026 Updated)

When you’re building a business, it’s easy to focus on the exciting stuff: landing customers, refining your product, and growing revenue.

But the fastest way to undo that hard work is to slip into “grey area” behaviour with your advertising, pricing, contracts or customer handling. Even if you don’t mean to mislead anyone, New Zealand law expects businesses to trade fairly - and customers (and competitors) can take action when they think you haven’t.

This 2026 updated guide is a practical checklist of unfair business practices we see trip up small businesses in New Zealand, plus what to do instead so you can stay compliant and protect your reputation from day one.

What Counts As An “Unfair Business Practice” In New Zealand?

In plain terms, an unfair business practice is any way of dealing with customers (or sometimes other businesses) that’s misleading, deceptive, overly aggressive, or likely to cause harm or confusion.

In New Zealand, the key laws that often come into play are:

• Fair Trading Act 1986 (FTA): focuses on truthful marketing, pricing and representations (what you claim, imply, or leave out).
• Consumer Guarantees Act 1993 (CGA): sets baseline guarantees for goods and services sold to consumers (like acceptable quality and reasonable care and skill).
• Contract and Commercial Law Act 2017 (CCLA): relevant where conduct around contracts becomes misleading or a party is induced into a contract unfairly.
• Privacy Act 2020: relevant when “unfairness” shows up through mishandling customer information, consent, or marketing lists.

It’s also worth remembering that “unfair” isn’t only about getting fined. It can lead to:

• refund demands and disputes that chew up your time
• bad reviews and reputation damage
• competitor complaints
• investigations or enforcement (depending on the issue)

The good news is that most problems are avoidable with a few solid processes, clear customer-facing terms, and consistent staff training.

1. Misleading Advertising And Overpromising (Even If It’s Unintentional)

If there’s one “unfair practice” that catches businesses off guard, it’s marketing that goes a bit too far.

Under the Fair Trading Act, you generally can’t mislead or deceive consumers - and you also can’t make claims that are likely to mislead, even if you didn’t intend to. That means your ads, website, social captions, emails, and sales scripts all matter.

Common Examples We See

• “Before and after” claims that aren’t representative of typical results (especially in health, fitness, beauty, and professional services).
• “Limited time” offers that aren’t actually limited (or are repeated every week).
• Greenwashing (broad sustainability claims like “eco-friendly” without specifics or evidence).
• “NZ made” / “NZ owned” claims that don’t match the reality of your supply chain or ownership.
• Testimonials presented as typical outcomes when they’re exceptional outcomes.
• Hidden conditions (for example, quoting a price “from $X” but the $X option is unrealistic).

What To Do Instead

Try this simple rule: say what you can prove, and prove what you say.

• Keep evidence for factual claims (specs, test results, supplier documents, screenshots of pricing, etc.).
• Make key conditions obvious (not buried in fine print).
• Train staff not to “freestyle” promises that aren’t in your standard offering.
• If you use influencers or affiliates, ensure they understand what they can and can’t claim about your product.

If your marketing and sales are growing quickly, it can also help to formalise what you promise customers in a clear set of Business Terms so there’s less room for inconsistent messaging.

2. Bait Pricing, Hidden Fees, And “Surprise” Costs

Customers don’t just care about the headline price - they care about what they’ll actually pay.

A common unfair practice is advertising a great price and then adding unavoidable fees later in the checkout process or after the job starts. Even when it’s “standard in the industry”, it can still be risky if it misleads customers about the real price.

Where This Comes Up

• Ecommerce checkouts: extra handling fees, admin fees, mandatory insurance, payment fees, or inflated delivery fees only shown late in checkout.
• Service businesses: quoting a base rate but not disclosing call-out fees, after-hours surcharges, or minimum charges.
• Subscriptions: “$0 trial” that turns into a paid plan without clear notice.
• Installations and packages: a low advertised price that excludes essential parts of the service.

What To Do Instead

Clarity upfront is usually the safest (and best for conversion, honestly).

• Make sure your pricing is clear, prominent, and consistent across your website, quotes and invoices.
• Disclose any unavoidable fees early (not only at the final step).
• If you genuinely can’t give a fixed price, explain what it depends on and provide a realistic range.
• Put fee structures into writing so staff apply them consistently.

If you sell online, it’s worth tightening your website terms so your payment, delivery and additional fees are properly disclosed in your Website Terms and Conditions.

3. Unfair Refund, Return, Or Cancellation Practices

Refunds are one of the quickest ways to lose a customer’s trust - not because refunds are always required, but because the “rules” can be misunderstood (or misrepresented).

In New Zealand, when you sell goods or services to consumers, the Consumer Guarantees Act generally provides automatic guarantees that can’t be contracted out of for consumer sales. This is where businesses can accidentally act unfairly by:

• telling customers “no refunds under any circumstances”
• refusing a remedy when goods are faulty
• sending customers to the manufacturer when the retailer is responsible
• imposing unreasonable hurdles for returns (like demanding original packaging for a genuine fault)

Common Risk Areas

Change-of-mind vs faulty goods: You usually don’t have to provide change-of-mind refunds (unless you promised them), but faults are different. If a product is faulty or not as described, CGA remedies may apply.

Services: If you provide services, you must generally provide them with reasonable care and skill and within a reasonable time. If the work is poor, customers can have rights to have it fixed or to receive other remedies.

Cancellation fees: Cancellation fees can be legitimate, but they should be transparently disclosed and not punitive. A fee that looks like a penalty can trigger disputes quickly.

What To Do Instead

• Write a returns and refunds policy that reflects what you actually do in practice (and train staff on it).
• Separate change-of-mind rules from faulty goods processes so customers don’t get the wrong message.
• Be careful with “store credit only” statements - these can be risky if a customer is entitled to another remedy for a genuine fault.
• Keep documentation (photos, assessment notes, repair logs) so you can handle disputes fairly and consistently.

Many businesses reduce refund disputes simply by setting clear expectations in their Returns, Refunds And Exchanges approach and aligning staff scripts with those rules.

4. High-Pressure Selling And Unclear Contract Terms

Unfair practices aren’t only about what you say - they’re also about how you sell.

High-pressure sales tactics can create legal and reputational risk, especially when customers don’t fully understand what they’re signing up to, or when contract terms aren’t properly disclosed. This can show up in:

• rushing customers to “sign now” without time to read terms
• presenting key terms only after payment
• using confusing language to hide limitations or exclusions
• locking customers into long renewals without clear notice

Even where a practice isn’t strictly illegal, it can still lead to chargebacks, complaints, and a pipeline full of unhappy customers.

What “Unclear Terms” Often Look Like In Real Life

• Scope creep fights: the customer thinks X was included, you think it wasn’t.
• Unexpected renewals: auto-renew terms not clearly explained.
• “No cancellation” statements: without a clear cancellation process, notice period or exit fees.
• Liability exclusions: trying to exclude everything, including things you may not legally be able to exclude (especially with consumers).

What To Do Instead

Strong contracts aren’t about being harsh - they’re about being clear.

• Use plain English terms and keep key commercial points prominent (price, scope, timing, and cancellation rules).
• Make sure quotes and proposals match your formal agreement (misalignment is where disputes start).
• Have a clear “what happens next” process: when the agreement starts, how the customer accepts, and what counts as a variation.

If you deliver services, having a tailored Service Agreement helps you set expectations clearly and avoid accidental overpromising.

And if you’re scaling, consider a structure where your day-to-day sales terms are consistent (for example, standard customer terms plus a schedule for project-specific scope).

5. Mishandling Customer Data And Marketing Consent

Data practices have become a huge part of “fairness” in modern business. If you collect customer information, track website behaviour, run email campaigns, or use customer lists for marketing, you’re handling personal information - and the Privacy Act 2020 expects you to do that responsibly.

From a customer’s perspective, “unfair” often looks like:

• signing up for a purchase and being added to marketing lists without clear consent
• not being told what information is collected and why
• sharing customer details with third parties unexpectedly
• making it hard to opt out of marketing messages
• collecting more data than you need (and storing it indefinitely)

Where Small Businesses Commonly Slip Up

Email marketing: If your email practices are too aggressive or unclear, you can end up with complaints, unsubscribes, and reputational damage. You’ll want to ensure your marketing processes are consistent with NZ’s rules around consent and transparency (and, where relevant, the Unsolicited Electronic Messages Act 2007).

Online stores and analytics: Cookies, tracking pixels, and retargeting can be legitimate - but customers should be told what’s happening in a clear, user-friendly way.

Customer databases: The more you collect, the more you have to protect. If a breach happens, you may have obligations to assess and notify.

What To Do Instead

• Only collect what you need, and explain why you’re collecting it.
• Have a clear opt-out process for marketing communications.
• Set internal rules for who can access customer data and how long you keep it.
• Make sure your website and onboarding flows match your written privacy documents.

For most businesses that collect customer info, having a clear Privacy Policy is a simple but powerful step toward building trust and reducing complaints.

Key Takeaways

• Under laws like the Fair Trading Act 1986 and Consumer Guarantees Act 1993, you need to trade fairly - not just in what you sell, but in how you advertise, price, and handle customer issues.
• Misleading advertising can happen accidentally, so make sure your claims are accurate, supported by evidence, and not hiding important conditions.
• Bait pricing and late-added fees can create real legal and reputational risk - aim to make the “real price” clear upfront.
• Refund and return disputes are often avoidable when your policies and staff scripts reflect consumer law and clearly separate change-of-mind returns from faulty goods remedies.
• High-pressure selling and unclear contract terms can lead to complaints and disputes - clear, tailored agreements help you set expectations and protect your business.
• Customer data handling is a core part of fair dealing today; if you collect personal information or market to customers, your privacy and consent processes need to be transparent and consistent.

If you’d like help tightening your customer terms, advertising claims, refunds policy, or privacy compliance, reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.