A couple selling their home looked around a number of different Real Estate Agencies while deciding which one to go with.  One Agency claimed to have the best sales in the area, which the couple found very appealing.  However when they asked for more information from the Agency, they found that the Agency did not have any sales evidence to back up their claim – they had just made the claim for effect.

Under the Fair Trading Act, a person who is “in trade” must not make unsubstantiated, false, or misleading, representations, such as saying that their services are of a particular kind, standard, quality, or quantity when they are not, and/or where the representation cannot be substantiated or proven.

The Agency claiming to have the best sales in the area may have breached the Fair Trading Act by doing so, because the claim seems to have been unsubstantiated and therefore falsely represents the standard and quality of the Agency’s services.  

If the Commerce Commission found the Agency liable, they could face substantial fines of up to $600,000 (and $200,000 in the case of an Agent found liable).

Real Estate Agencies and Agents must make sure they are aware of their obligations and duties under the Fair Trading Act, that extend beyond misrepresenting what they are selling.

Unsubstantiated, false, or misleading, statements about the quality of their services or their credentials are equally as serious under the Act, and could result in large financial penalties, not to mention the possible reputational effects.