The Government is increasing penalties for breaches of Fair Trading Act and misleading advertising.

Minister of Commerce Nicola Willis says legislation to be introduced to Parliament early next year will increase the maximum penalty for breaches of the Fair Trading Act from $600,000 to the highest of three times the value of the commercial gain, the value of the transactions, or $5 million. 

They will also help to ensure businesses who play by the rules are not disadvantaged by competitors using unfair means to woo their customers away from them. The existing rules do little to prevent large retailers from further entrenching their market dominance. 

The changes do not mean all breaches of the Act will incur higher penalties. The courts will continue to have discretion to consider a range of factors.

Following consultation with business and other groups, the Government has decided not to proceed, at this time, with proposals to stop directors taking out insurance or indemnifying themselves from penalties under the Act. 

They have also opted not to progress proposals to expand infringement fees and unfair contract terms provisions. 

Commerce and Consumer Affairs Minister Scott Simpson says the changes to the Act will ensure greater protection for consumers. 

Between July 2020 and July 2025, the Commerce Commission received more than 48,000 complaints about fair trading issues such as misleading advertising, inaccurate pricing, refund refusals, and subscription traps,  Scott Simpson says. 

The changes are expected to become law later next year, following public consultation through the select committee process. 

Key points to note: 

• Penalties for breaching most provisions, including misleading and deceptive conduct, will increase from a maximum of $200,000 for individuals and $600,000 for body corporates to the greater of: 

• $1 million for individuals or $5 million for body corporates; or 

• Three times the value of the commercial gain made or loss avoided; or 

• The value of the consideration for the transaction(s) that constituted the contravention. 

• Maximum penalties for breaching management bans will increase from $60,000 to $200,000. 

• Maximum penalties for other conduct like breaching consumer information requirements, consumer transaction rules, and impeding enforcement will increase from $10,000 to $60,000 for individuals and from $30,000 to $200,000 for body corporates. 

• Most breaches will move from a criminal liability regime to a civil liability regime. Conduct that is serious or deliberate will remain criminal offences – such as demanding payment without intending to supply, serious product safety breaches, or obstructing the Commerce Commission.