Labour says it would ban paint insurance on new cars, stop shops pushing extended warranties at the checkout and force gyms, ticket sellers and subscription services to show the full price upfront, under a consumer law it is taking into the 7 November election.
Party leader Chris Hipkins announced what Labour calls its “fair go law” on Thursday at the MΔngere Budgeting Services Trust in South Auckland. 1News reported the policy is pitched around the idea that “the price you see is the price you pay”.
“We’ve all been there before. The gym membership with surprise fees. The meal kit subscription that’s impossible to cancel. The worthless insurance on your new car,” Hipkins said.
“Across the board, New Zealanders are being fleeced of their money, and the Government can do something about that. Businesses should be making money by providing valuable products and services, not by tricking people out of their money.”
The plan covers six everyday areas where people often find the final bill is bigger than the advertised price, namely cars, electronics and whiteware, phones and internet, subscriptions, event tickets and gyms.
The biggest changes would land on car yards. Paint and navigation insurance sold with cars would be banned outright, and so would mechanical breakdown cover that excludes “almost everything that could break down”, according to the 1News report. Other insurance sold at the point of a car sale would come with a 14-day cooling-off period, so a buyer could change their mind without penalty.
Labour’s commerce and consumer affairs spokesperson Arena Williams, the MP for Manurewa, said the Commerce Commission had studied these products and found some paid out only 2 to 3 per cent of what customers paid in premiums.
“Thousands of people in South Auckland are already paying off these insurances via debt that they shouldn’t be paying for anyway. That’s why we’re going to stop them,” she said.
Car dealers would also be banned from taking secret commissions on insurance, including so-called flex commissions, which let a dealer increase the interest rate on a customer’s car loan. Before anyone signed up for a car sold with finance or insurance, the seller would have to show the total cost over the life of the agreement.
For whiteware and electronics, shops would no longer be allowed to sell an extended warranty on the same day a customer buys the item. Warranties and insurance could still be sold, but only the following day or over the phone. Williams said many buyers were already covered by their home and contents insurance, and that extended warranties often duplicated rights people already have under the Consumer Guarantees Act.
“You shouldn’t need to be a lawyer to buy a washing machine and get a good deal,” she said.
Gyms would have to show a clear weekly price upfront rather than advertising a low sign-up price and locking members into long exit periods. Inflated penalty charges, such as fees for a lost key tag, would be banned.
“If the real price is $65 a week, or if the real price is $18 a week, consumers should be able to compare those two products,” Williams said. She argued small gyms would gain a level playing field against bigger chains that use cheap sign-up deals to get people in the door.
Gym pricing has already been tested in court. In June the Commerce Commission’s case against CityFitness ended with the chain fined $1.12 million for hiding a compulsory fee behind its advertised price.
Phone and internet companies would have to show the full price upfront and would be barred from charging what Labour calls “unfair exit fees” or using “unclear automatic renewals”. Subscription services, including meal kits and streaming television, would need to offer cancellation online and clearly say when an introductory offer ends, what the ongoing price will be and when customers will be charged. Labour says cancelling should be “as easy as signing up”.
Unwanted subscriptions are a bigger drain than many people realise. In August Westpac said it was blocking $75,000 a day in subscription payments its customers no longer wanted.
Ticket sellers would have to include all unavoidable booking and processing fees in the advertised price. Discounts that leave out mandatory fees would be treated as misleading, and businesses could no longer add compulsory charges as a customer moves through an online checkout.
Williams framed the policy as a dividing line with the Government. “For too long, National have shrugged their shoulders and said it’s up to consumers to advocate for their rights,” she said. “Well, Labour’s not the party that will leave consumers to fend for themselves.”
Asked why Labour had not made these changes during its own two terms, Hipkins told reporters the party had work under way when it left office in 2023. “Progress has ground to a halt over the last three years. This Government have totally dropped the ball,” he said.
National did not engage with the detail of the proposals. Its campaign chair Simeon Brown turned the attack back on Labour’s tax plans. “Labour says it wants to ban hidden fees, but the biggest hidden fee facing Kiwi households comes from Labour itself,” 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.”
National says Labour would bring in nine new taxes, a figure Labour disputes.
The party’s own announcement says the policy builds on its earlier promise to ban price gouging and is part of its wider cost of living package. RNZ’s report on the announcement sets out the full list of measures.
Voters weighing up where each party stands on cost of living, tax and other issues can compare them using the NEWS WIRE voting tool.
Have you been caught out by a surprise fee, a gym contract you could not escape or insurance you never needed when you bought a car? Would a law like this help, or should consumers be left to shop around? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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