A company has been fined $1.88 million for misleading product claims. The District Court found that the company had made false and misleading representations about some of its products over a four year period.

The company claimed its products were of higher quality than they were and this was likely to mislead the public.

It also failed to properly test the products, and made false claims that the products had been independently tested.

The Court initially intended to impose a higher penalty but this was reduced because the company had pleaded guilty, co-operated with the Commerce Commission, and taken remedial measures.

The Court described the company’s behaviour as “grossly negligent”. It said that, “senior management of the company ought to have known of the large-scale non-compliance, it was the company’s responsibility to have proper systems in place to ensure compliance with the standard”.

Under the Fair Trading Act, businesses can be fined up to $600,000 for each false and/or misleading representation. In this case there were multiple breaches of the Act.

The Commerce Commission’s advice to companies and traders providing goods and services is: “If you can’t back it up, don’t say it”.

Ben Ruback

Solicitor