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Financial Markets Conduct Act 2013

Fair dealing - Misleading or deceptive conduct, false or misleading representations, and unsubstantiated representations

23: Unsubstantiated representations

You could also call this:

"Don't make claims about something you're selling if you can't back them up with good reasons."

Illustration for Financial Markets Conduct Act 2013

When you are selling something, you must not make claims that you cannot back up with good reasons. A claim is unsubstantiated if you do not have reasonable grounds for making it when you say it, even if it is not false or misleading. You need to have good reasons for what you say when you are selling something.

If a reasonable person would not expect you to have proof for what you are saying, then this rule does not apply. You can find more information about what this means in sections 24 to 27. When you are talking about financial products or services, you must be careful what you say.

You must have good reasons for what you say when you are talking about financial products or services, and when you are buying or selling them, or using them to promote something. This includes when you are dealing with financial products, or supplying financial services, or telling people about them. You must be honest and have good reasons for what you say when you are doing these things.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5155241.

Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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22: False or misleading representations, or

"Telling the truth when buying or selling financial products"

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"The court considers all the facts when someone breaks financial market rules"

Part 2Fair dealing
Misleading or deceptive conduct, false or misleading representations, and unsubstantiated representations

23Unsubstantiated representations

  1. A person must not, in trade, make an unsubstantiated representation.

  2. A representation is unsubstantiated if the person making the representation does not, when the representation is made, have reasonable grounds for the representation, irrespective of whether the representation is false or misleading.

  3. This section does not apply to a representation that a reasonable person would not expect to be substantiated.

  4. In this section and sections 24 to 27, representation means a representation that is made—

  5. in respect of financial products or financial services; and
    1. in connection with—
      1. any dealing in financial products; or
        1. the supply or possible supply of financial services or the promotion by any means of the supply or use of financial services.