Fair Trading Act 1986

Unfair conduct - Unfair practices

20: Referral selling

You could also call this:

“You can't make someone buy things by promising rewards for finding new customers”

You are not allowed to convince someone to buy things or services by telling them they will get money or rewards later for giving you names of other potential customers or helping you sell to other people. This rule applies only if getting the money or reward depends on something that happens after the person agrees to buy from you.

This rule does not apply when you buy things to sell them to other people.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM96946.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection

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19: Bait advertising, or

“Rules about advertising things for sale at a certain price”


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21: Demanding or accepting payment without intending to supply as ordered, or

“It's against the law to take money for things you don't plan to give”

Part 1 Unfair conduct
Unfair practices

20Referral selling

  1. Subject to subsection (2), no person shall induce another person to acquire goods or services by representing that the person acquiring the goods or services will, after the contract for the acquisition of the goods or services is made, receive a rebate, commission, or other benefit in return for giving that person the names of prospective customers or otherwise assisting that person to supply goods or services to other users or consumers, if receipt of the rebate, commission, or other benefit is contingent on an event occurring after that contract is made.

  2. Nothing in subsection (1) applies to the acquisition of goods for resupply.