Top firm knocks Commerce Commission's ‘naming and shaming’

The NZCC continues to ‘name and shame’ businesses, despite the Commission itself admitting complaints do not, in themselves, indicate legal violations.

Russell McVeagh is standing firm that the New Zealand Commerce Commission (NZCC) may be remiss in continuing to name specific businesses in its Consumer Issues Report.
In a note published by lawyers Sarah Keene, Polly Pope, Troy Pilkington and Joe Edwards, the top law firm slammed what they call ‘naming and shaming’ by the agency.
“It is unfortunate that the NZCC continues to publish the number of complaints levelled against specific businesses,” the lawyers wrote.
“This 'naming and shaming' risks reputational damage to those businesses that outweighs any benefit to consumers,” they added.
The law firm notes that the NZCC itself stresses that complaints do not, in themselves, indicate that any law has been breached or establish that any consumer hard has been generated by the conduct complained about.
Russell McVeagh also pointed out that the sheer scale of larger traders and not greater culpability make them more likely to generate more complaints.
It also said that orchestrated complaint campaigns against traders can inflate complaint numbers and that the report itself can discourage the public to complain if they are made aware that the NZCC cannot act on a matter.
Moreover, the law firm said that regardless of actual illegality or extent of consumer harm, matters attracting greater publicity may yield a greater number of complaints.
Complaints can also be about a single matter or many matters, with some complaints on the same matter likely reaching other complaint bodies instead of the NZCC, the law firm added.
“As we noted in respect of the 2015 report, the numbers and lists of names also do not give sufficient prominence to the context in which complaints arose,” said the law firm.
“The reporting in the media of last year's Consumer Issues Report is clear evidence of the likelihood of error, despite the caveats to the numbers and lists of names noted in the report,” it added.
Russell McVeagh said that regardless of the NZCC’s caveats, “publishing the number of complaints received about individual named companies in an official report about NZCC enforcement gives the impression those companies have done wrong, or are more likely to have done wrong, than other companies who are not listed.”
The law firm proposed that the next edition of the now-annual report would present information in a more balanced way by listing the number of complaints by industry, only naming businesses where the NZCC has proven (or the business has admitted) engaging in conduct in breach of the law, and adding more detail and priority to the valuable colour-coded risk matrixes prepared by the NZCC.
Nonetheless, the law firm also pointed to the positives of the report.    
“The NZCC's analysis of potential current and emerging risks to consumers continues to be an interesting insight into its likely enforcement priorities for the year ahead,” the law firm said.
“Perhaps most helpfully, the report includes a list of current issues the NZCC is considering, with colour coding indicating the priority it is giving those issues based on a model that assesses the potential likelihood of risk and, if so, the potential detriment to consumers,” it added.

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