Plain language law

New Zealand law explained for everyone

Fair Trading Act 1986

Unfair conduct - Unfair practices

22: Misleading representations about certain business activities

You could also call this:

“Don't lie about home businesses or money-making opportunities”

You are not allowed to make false or misleading statements about business activities that can be done from home. This includes lying about how much money you can make, how risky it is, or any other important details.

If you invite people to join a business activity where they need to do work or invest money and do work, you can’t make false or misleading statements about how profitable it is, how risky it is, or any other important aspects of the business.

These rules are meant to protect people from being tricked into joining business activities that might not be as good as they sound. It’s important to be honest when talking about business opportunities, especially when you’re asking people to work or invest their money.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM96948.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection
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Part 1 Unfair conduct
Unfair practices

22Misleading representations about certain business activities

  1. No person shall make a representation that is false or misleading in a material particular concerning the profitability or risk or any other material aspect of any business activity that that person represents as one that can be, or can be to a substantial extent, carried on at or from a person's place of residence.

  2. No person who invites, whether by advertisement or otherwise, persons to engage or participate, or to offer or apply to engage or participate, in a business activity requiring—

  3. the performance by the persons concerned of work; or
    1. the investment of money by the persons concerned and the performance by them of work associated with the investment—
        1. shall make, with respect to the profitability or risk or any other material aspect of the business activity, a representation that is false or misleading in a material particular.

      Compare
      • 1975 No 113 s 48B
      • 1979 No 40 s 23