2 Aug 2017

Petition to end 'service fees' presented to Parliament

4:30 pm on 2 August 2017

Far too many people are being hit with extra costs they did not know about when they signed contracts to buy goods, says Consumer New Zealand.

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Photo: 123rf

The organisation has just presented a 10,000-strong petition to parliament asking for legislation to protect against hidden costs.

Consumer New Zealand calls these hidden costs "sneaky fees".

Chief executive Sue Chetwin said they occurred far too often, and she asked the Commerce and Consumer Affairs Minister Jacqui Dean to take steps to fix the problem.

"We reckon about $68 million is taken from consumers in hidden fees each year, and we think that is serious," Ms Chetwin said.

Research carried out by her organisation found problems with businesses such as online florists, sports event promoters, theatre managers, accommodation providers, car dealers and others.

She gave several examples.

One person booked a bus ticket advertised for $22 and then discovered a $3.99 booking fee, which seemed like a rip off.

Another person booked an Airbnb stay in Auckland and found the $71 cost leapt by $13 for a service fee.

Ms Chetwin said these so-called "booking" or "service" fees should be prohibited under the Fair Trading Act.

In receiving her petition, Ms Dean agreed there were problems, especially with services offered on line.

She said she would look at the problem carefully but gave no assurances of change to a law that is working quite well already.

"I have to have a look at the petition," she said.

"I do believe that the Fair Trading Act is a good act - it does provide a catch-all for deceptive behaviour and not treating consumers properly, but I am certainly prepared to have a look at this petition."

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