Coronavirus: Businesses warned to be upfront about Covid-19 surcharges

Tuesday, 19 May 2020

Businesses giving 'bogus' reasons for coronavirus surcharges could be in breach of the Fair Trading Act, consumer watchdogs warn.

Jon Duffy, chief executive of Consumer NZ, said several complaints had been received about tradespeople charging extra to cover the cost of personal protective equipment (PPE) but not using any.

Most of the complaints were made while New Zealand was at Covid-19 alert levels 3 and 4, but Duffy expected an increase as more businesses reopened at level 2.

And it's not just Consumer NZ fielding complaints.

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A spokesman for the Commerce Commission said, as of Tuesday, it had received 15 complaints related to Covid-19 and surcharges.

The majority were received during alert levels 3 and 4, with three received on or after the move to level 2 on May 14.

Duffy said businesses were within their rights to apply surcharges for things like PPE but needed to be honest and upfront with customers.

'They can't mislead consumers about the reasons for the extra charge. If they're giving a bogus reason, they could be in breach of the Fair Trading Act,' he said.

'And if they're going to charge extra, they should put up clear notices or tell people there's a surcharge before goods or services are provided.'

New Zealanders most commonly encounter surcharges on public holidays, when employees are paid a higher rate under the Holiday Act.

Many businesses, particularly in hospitality, apply a surcharge in an attempt to recover the additional wage costs.

As with coronavirus surcharges, customers must be informed about additional charges on public holidays and not be misled about the reasons.