Labour takes aim at hidden fees with wide-ranging consumer crackdown

Labour would crack down on a wide array of "unfair" consumer fees, if elected, in what the party calls a "fair go" policy that will protect people from being ripped off.

Party leader Chris Hipkins unveiled the policy - intended to ensure "the price you see is the price you pay" - at Māngere Budgeting Services Trust in Auckland this morning.

"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," he 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."

Labour commerce spokesperson Arena Williams said some of the fees would be banned outright and others would face new transparency rules.

"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."

Under the plan, paint and navigation insurance sold with cars would be banned outright. Mechanical breakdown cover that excludes "almost everything that could break down" would also fall under the ban on what Labour calls "junk insurance".

Other insurance sold at the point of a car sale would carry a 14-day cooling-off period where a purchaser could change their mind over a fortnightly period without penalty.

Williams said the Commerce Commission had studied the products and found some paid out only 2% to 3% of what customers paid in.

"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."

Car dealers would also be banned from taking secret commissions on insurance, including "flex commissions" that allow them to increase the rates on customers' loans.

Sellers would also have to show the total cost over the life of the agreement before a customer signs up for a car sold with credit or insurance.

Shops would also be barred from selling extended warranties on whiteware and electronics on the day a customer buys the item. Instead, insurance and extended warranties would have to be sold the following day or over the phone.

Williams said many people were already covered through home and contents insurance, and warranties duplicated rights under the Consumer Guarantees Act in many cases.

"You shouldn't need to be a lawyer to buy a washing machine and get a good deal."

Gyms would also be pushed to show clear prices upfront rather than lock members into long exit periods.

"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 said small gyms would benefit from a level playing field against bigger chains that use low sign-up prices to get people in the door.

Inflated penalty charges, such as lost key tag fees, would be banned.

Likewise, phone and internet providers would have to show the full price upfront and would be barred from charging "unfair exit fees" or using "unclear automatic renewals".

Subscription services such as food boxes and streaming TV would also need to offer online cancellation and clearly state when an introductory offer ends, what the ongoing price would be and when customers would be charged.

Labour said it wanted to also make cancelling a subscription "as easy as signing up". The proposed changes would also force ticket sellers to include all "unavoidable" booking and processing fees in the advertised price.

Discounts that leave out mandatory fees would be banned as misleading, and extra mandatory fees could no longer be added as customers move through the checkout.

Asked why Labour had not acted on the issues in its own two terms, Hipkins said the party had work underway when it left office.

"Progress has ground to a halt over the last three years. This Government have totally dropped the ball," he said.

Speaking on the campaign trail, Hipkins also rejected National's claim that Labour's policies carried a massive hidden cost.

"Nicola Willis looks more and more desperate by the day as she tries to cling on to a Government that has failed on every one of its promises."

He said Labour's capital gains tax forecasts assumed average annual house price growth of 3%, below Treasury's latest projection, so he did not expect to revise them.

Hipkins also called a website encouraging voters to split their vote to create an overhang for the right "a rort".

"Trying to rort the electoral system to protect your own entrenched interests, as clearly a group of very wealthy New Zealanders are currently trying to do, is an absolute rort."

When asked about Labour's announcement, National's campaign chairperson Simeon Brown and leader Christopher Luxon were equally on message in responding.

"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.

"The alternative is a radical Labour coalition that would squander surpluses, leave New Zealand exposed with more debt, and Kiwis paying nine new taxes."

Labour disputes the characterisation that it would level nine new taxes.