Navigating online reviews
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What does the FTA say?The Fair Trading Act 1986 (FTA) contains a general ban on businesses engaging in misleading or deceptive conduct. It also specifically prohibits those in trade from engaging in conduct that is liable to mislead as to:
Businesses face fines for breaches of these sections of the FTA of up to $200,000 for an individual and up to $600,000 as a company. How does the FTA apply to customer reviews?If the way a business collects, handles or publishes online customer reviews has the effect of misleading consumers about products or services, it may breach the FTA and be liable to prosecution. The Commerce Commission is currently focussing on online retail and has recently prosecuted a business for allegedly misleading consumers by manipulating online reviews. Commerce Commission GuidanceThe Commerce Commission has published guidance to help businesses comply with the FTA in relation to customer online reviews (click here or visit comcom.govt.nz to view it). The guidance is set out below: Collecting reviews:
Processing reviews:
Publishing reviews:
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