Consumer Law: Year in Review 2025

Significant developments in 2025

District Court finds Fair Trading Act breaches by Look Sharp

Walond Limited (Look Sharp) was ordered to pay $292,500 after pleading guilty to making misleading representations about product prices and consumers rights under the Consumer Guarantees Act 1993 (CGA), in breach of the Fair Trading Act 1986 (FTA). Misrepresentations included widespread pricing errors and incorrect refund and exchange information which directly contradicted customers rights set out in the CGA.

 

New Zealand launches Consumer Data Right

The Customer and Product Data Act 2025 received Royal assent in March, establishing a Consumer Data Right (CDR) in New Zealand requiring data holders to share customer and product information. The banking sector is the first to be designated, enabling "open banking" through allowing customers to share their banking information with trusted third parties and authorising accredited persons to initiate payments on consenting customers' behalf. ANZ, ASB, BNZ and Westpac will be designated from 1 December, with Kiwibank following in 2026. Read more

 

2degrees penalised for misleading "free" roaming claims

2degrees was ordered to pay a $325,000 penalty by the District Court after admitting to making misleading claims that its Australian business roaming was "free" or "at no extra cost", when in reality it was capped at 90 days per year. After pleading guilty to five breaches of the FTA, 2degrees has removed the 90-day limit, refunded customers and updated its promotional material.

 

Right to Repair Bill discharged from Parliament

The Consumer Guarantees (Right to Repair) Amendment Bill, a member’s bill introduced by Hon Marama Davidson last year to strengthen consumer rights to repair products and reduce waste, has been discharged from Parliament after Davidson arrived late to its second reading. Prior to this, its prospects were already uncertain following the Economic Development, Science and Innovation Committee's recommendation against its passing and NZ First's withdrawal of support.

 

Jetstar hit with FTA penalty

Jetstar received a $2.25 million penalty, the second largest under the FTA, after entering an early guilty plea for misrepresenting consumer rights to compensation for flight delays and cancellations within its control. The airline led some customers to believe they were not entitled to make a claim, rejected claims outright, and imposed monetary caps on accommodation, meals and transport, contrary to its statutory obligations under domestic and international law. Jetstar remediated thousands of affected customers, amounting to over $1 million in compensation. 

 

NZCC takes City Fitness to court

The New Zealand Commerce Commission's (NZCC) filed sixteen charges under the FTA against City Fitness alleging misleading advertising of unobtainable gym membership prices which failed to include a compulsory fee, and the incorrect labelling of this fee as a 'transaction fee' despite no connection to the processing of payments. This underscores the NZCC's push to eliminate drip pricing – where low advertised prices later inflate with hidden fees. 

 

NZCC issues 'Stop Now' letter to PD Mart

The NZCC has issued a 'Stop Now' letter to PD Mart while they investigate potentially misleading labelling claims that its car seats comply with safety standards, in potential breach of the FTA. With children's safety at issue, the NZCC takes a zero-tolerance stance, prompting PD Mart's swift recall of affected products.

 

HelloFresh criminally charged for misleading subscription practices

HelloFresh was required to pay a $845,000 penalty after pleading guilty to misleading customers into reactivating subscriptions, in breach of the FTA. HelloFresh called former customers under the premise of gathering feedback, offering discounts without clear disclosure that accepting would reactivate subscriptions. This ruling reinforces the NZCC's crackdown on deceptive online sales tactics like subscription traps.

On the horizon for the new year 

Amendments to the Fair Trading Act announced

Major changes to the FTA are anticipated following the Government's recent announcement of new legislation intended for introduction to Parliament early next year. The maximum penalty for FTA breaches by body corporates will increase from $600,000 to the highest of three times the value of commercial gain, the value of the transactions, or $5 million, aiming to eliminate any financial incentive for non-compliance. In addition, most breaches will shift from a criminal liability regime to a civil liability regime, with the exception of serious and deliberate offences. This would allow the NZCC to take action on the balance of probabilities, rather than meeting the higher criminal standard of proof.

 

Expansion of the Consumer Data Right

The Government is considering regulations to designate the electricity sector under the Customer Product Data Act 2025, enabling a CDR in this sector.  Last year, the Ministry of Business, Innovation, and Employment consulted on the proposed policy settings. If adopted, the CDR would allow consumers to share information about their electricity consumption with trusted third parties and require electricity companies to share information about their goods and services. Read more

 

Credit Contracts and Consumer Finance Amendment Bill 

On 20 October 2025, the Finance and Expenditure Select Committee reported back to the House of Representatives on the Credit Contracts and Consumer Finance Amendment Bill (Bill) recommending by majority that it be passed. If enacted, the regulatory responsibility for the Credit Contracts and Consumer Finance Act will be transferred from the NZCC to the Financial Markets Authority. With the Bill awaiting its second reading, its progression through the remaining Parliamentary stages remains to be seen.  

Hot global topics

Federal Court orders Optus to pay $100m penalty for unconscionable conduct 

Optus Mobile was fined $100 million for engaging in sales tactics, including exerting undue pressure on customers, failing to explain terms and conditions to vulnerable customers, and selling products outside of customers financial means. These actions contravened Australia's unconscionable conduct prohibitions, equivalent to those introduced in New Zealand in 2022. Optus has additionally undertaken to compensate impacted consumers and improve its internal systems. Read more

 

Significant changes to UK consumer protection laws and enforcement action

Effective April 2025, the UK Digital Markets, Competition and Consumers Act 2024 grants the Competition and Markets Authority (CMA) direct enforcement powers for consumer law breaches and expands the list of 'automatically unfair commercial practices' to include fake consumer reviews, omitting material information from invitations to purchase and drip pricing. To assist businesses' compliance, the CMA has published guidance on unfair commercial practices, the rules on price transparency and on obtaining customer consent for optional charges. In 2026, additional consumer protection rules requiring retailers' provision of transparent pricing, renewal dates and cancellation policy information, will make subscriptions easier to manage and exit.

The CMA recently launched investigations into eight businesses (including secondary ticketing sites, driving schools, a gym and homeware retailers) suspected of breaching consumer law through their use of fees, misleading time-limited offers and the automatic enrolment of customers for optional charges. The CMA is also issuing advisory letters to 100 businesses, raising concerns about their additional fees and online sales tactics, to ensure compliance with consumer protection law and avoid later enforcement action.

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This content is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter, please contact a Russell McVeagh partner/solicitor.