Labour to ban 'hidden fees' with new consumer protections

Labour wants to strengthen consumer protections with new rules the party believes will stop New Zealanders being hit by “hidden fees”.

These new rules include banning “junk” car insurance, such as paint insurance or mechanical breakdown cover “that excludes almost everything”.

Retailers would be prohibited from “putting pressure on customers” to buy insurance or extended warranties at the checkout for new products such as whiteware and electronics. These would instead have to be “sold the following day or over the phone”.

If products are bought on credit, retailers would be required to show the total cost over the life of the agreement before customers sign up.

Labour also wants to make it easier for people to cancel subscriptions, with online cancellations for services. It says “unclear automatic renewals, unfair exit fees, and excessive notice periods” would be banned.

This would also be the case for gym subscriptions, with Labour saying cancelling should be as easy as joining. Inflated penalty charges, such as for lost key tags, wouldn’t be allowed.

When New Zealanders buy tickets for an event, the seller would be required to include all unavoidable booking, processing and other fees in the advertised price. Other mandatory charges could not be added as the buyer goes through the checkout process.

Labour says it would implement these changes and more through a “Fair Go Law” that it believes would “stop businesses making money by tricking their customers”.

“People aren’t asking for much. Just tell them the real price upfront and make it as easy to leave a subscription or membership as it was to join,” commerce and consumer affairs spokeswoman Arena Williams said.

“And those extended warranties? In many cases, what they cover is already your right under the Consumer Guarantees Act.”

Party leader Chris Hipkins said that, with the cost of living impacting Kiwis, Labour would put a stop to “hidden fees” people never saw coming.

National’s campaign chairman, Simeon Brown, responded to the announcement by saying Labour had its own “hidden fee”. He repeated National’s allegation that Labour has an unfunded hole of about $18.8 billion, which Labour has disputed.

“Under Labour, every household would be stung with $2263 in extra tax to help pay for Labour’s $18.8 billion bill,” Brown said.

“National believes every Kiwi deserves a fair go at a more secure financial future, and the only way to achieve that is with a National Government that has a plan to keep growing the economy, spending sensibly and paying down debt, with no new taxes.”