Category: Public Media

Source: Radio New Zealand

What’s being termed ‘dark patterns’ are becoming increasingly prevalent on shopping websites as online businesses scramble for your dollars

Subscriptions that are impossible to cancel, hidden fees added at the checkout, and constant offers of discounts in exchange for your personal information – dark patterns are the internet traps designed to make you spend more money.

While not explicitly illegal, they’re getting overwhelming.

Last month, food delivery company Hello Fresh was fined $845,000 for misleading its customers, and if you’re online shopping this Christmas, you need to be on the lookout.

“It’s things like hidden fees, where you make a purchasing decision, get to the checkout, and suddenly there’s $20, $30, $40 extra,” said Consumer NZ’s Chris Schulz.

“It’s things like scarcity cues … everyone’s seen those, ‘only one left at this price’ notes, and then there’s subscription traps, everyone’s had a meal kit delivery service or a gym membership that they just can’t be bothered to cancel because you know it’s going to be painful.”

Consumer NZ has just released a report detailing its research on dark patterns.

The overwhelming feedback from research participants was frustration, said Schulz.

“[Dark patterns] have a triple impact, they take our money, people told us they have spent more because of dark patterns… they waste our time, some dark patterns are designed to keep us engaged longer on sites or to stop us from going elsewhere.

“They just affect our confidence as well; they chip away at how people feel, especially if you’re in a less confident bracket.”

Some dark patterns also invade our privacy.

“You’ll often get these offers, ’10 percent, if you sign up,’… and then you’ll have to put in your name, you’ll have to put in your address, your date of birth, whether you’re male or female or other, sometimes even more than that.

“Then these companies have information on you, we know they can use that data to target advertising.”

But dark patterns are also incredibly effective.

Alex Sims, a commercial law professor from Auckland University, said a study that monitored websites found those using dark patterns had double the participation rate than websites that didn’t. When there was an aggressive use of dark patterns, participation quadrupled.

But Sims doesn’t think we need new laws, because the Fair Trading Act and the Privacy Act, while not explicitly defining the shady sales tactics, already cover most dark patterns.

“The main one is under the Fair Trading Act, where businesses cannot be misleading, deceptive and mislead people about price… quite a few of the dark patterns are misleading, so therefore breach the Fair Trading Act.”

Under the Privacy Act, if information about an individual has been collected in an unfair manner, then that individual has grounds to lay a complaint, she said.

“Say, for example, you want to buy a pair of shoes… you go to the checkout, and then it says, ‘create an account,’ and it requires your email address, your phone number, and all these other things that you don’t want to give.

“Arguably, you could say that’s not fair because the only way that you could buy those shoes is to enter that information.”

The reason why dark patterns have become so prolific isn’t because of a lack of laws, she said, but a lack of enforcement.

“Even if [companies] do go to the extreme end… what will happen is normally the Commerce Commission will come along, write a letter and say, ‘look we’re investigating this,’ and often if the company goes ‘oh look I’m really sorry we didn’t realise we won’t do it again,’ [and] sometimes the Commerce Commission will keep on going but most of the time they won’t.”

But it’s also a matter of resourcing; taking legal action uses a lot of time and staff, and it’s expensive. But while providing the Commerce Commission with more resources would be a good idea, she said, there is some onus on consumers as well.

“First of all, what they should be doing is when they experience dark patterns, is stop using that website, and that’s what the Consumer NZ report actually identified… almost 40 percent of people had stopped using [those] websites.”

Sharing your bad experience is also helpful, and people can also make a complaint to the Commerce Commission.

“That’s why Hello Fresh was actually prosecuted because a whole lot of people complained… if the Commerce Commission doesn’t know anything about it, it can’t do anything.”

The Hello Fresh case centred around cold calls made to customers between February 2022 and July 2023, where customers were offered vouchers without being told that accepting them would reactivate their subscription to the service.

While this case was still before the courts, Consumer NZ was conducting its study on dark patterns and had participants try to cancel a Hello Fresh subscription.

At the time, this was a five-step process.

Hello Fresh has since updated its subscription services, telling Consumer NZ it streamlined and simplified its cancellation process in the wake of Consumer’s research.

But these kinds of sales tactics remain rife, and in this episode, Sims tells The Detail what tweaks to existing laws she thinks would help tackle the issue.

“With the Privacy Act, have it so when someone has signed up to social media or something like that, that the highest privacy preservation settings are set … and then allow the user, if they want to, then to share it more.

The second one is to prevent nagging, which Sims explains is when little boxes saying ‘buy this now’ or ‘enter your email for a discount’ keep popping up while a shopper is on a website.

“In Europe, the GDPR (General Data Protection Regulations) and the Data Act say basically you can’t do that and you’ve got a set time period, so you can’t ask them more than say once every year,” she says.

Then there’s the tweak to prevent subscription traps. Sims says it should be as easy to cancel a subscription as it was to sign up for it.

But amidst the frustration and anxiety these dark patterns cause, there is hope that it could encourage consumers to return to in-store shopping.

Schulz hopes that is the case.

“There is something about that experience.

“I love talking to shopkeepers, you don’t get that experience when you’re online, sometimes you can have really good conversations… I think that could be an upside.”

Check out how to listen to and follow The Detail here.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Tenants have more control in New Zealand’s rental market than they have for a while.

With rents soft and more options to choose from, it’s not a bad time to be looking for a place to live.

But do you know the rules your landlord has to abide by?

Recent Tenancy Tribunal rulings show some are still getting it wrong.

Turn up unannounced

Landlords can’t just turn up to their rental properties without giving notice, even if it is just to do something outside.

They need to give 48 hours’ notice for things like inspections and 24 hours’ notice for repairs or maintenance. If they don’t, they can have exemplary damages awarded against them to a maximum of $1500.

In one case heard by the Tenancy Tribunal recently, a tenant claimed their landlord arrived at the premises uninvited and unannounced, entered the garden and shouted at them about parking in a shared driveway. The landlord argued he had been working on a neighbouring property and noticed where the car was parked.

The tribunal said even if the landlord only stopped at the gate and did not enter the garden, he raised his voice and shouted at the tenants and threatened to end their tenancy. It said the behaviour was a breach of the tenant’s quiet enjoyment and interfered with their reasonable peace, comfort and privacy.

If a house is listed for sale, the tenant has to give permission for open homes to be held.

Require professional cleaning

Your landlord cannot ask you to pay for professional cleaning when you leave, including carpet cleaning.

Tenants are only required to leave the property in a reasonably clean and tidy state.

Sarina Gibbon, director of Tenancy Advisory, said the introduction of new rules around pets could make this a bit murkier. “With the pet provisions coming in, it’s going to be really interesting.”

She said one of the examples given with the introduction of the new rules was that landlords might say a pet was allowed if carpets were cleaned to a professional standard. “That’s just an example given by Parliament… it doesn’t mean it will cover all situations.

“It’s one of those things that I think we’re just going to have to watch how the tribunal interprets the new laws and applied them to give the industry guidance. At the moment we’re still operating under the old rules.

“But without pets, absolutely a tenant cannot be required to professionally clean the carpet.”

Charge a pet bond (yet)

Landlords are not allowed to collect a pet bond until 1 December.

“I’m hearing every week landlords are collecting pet bonds and they have been all year when they are actually not legally allowed to until December 1,” Gibbon said.

“So if a tenant asks for a pet on November 30 and the landlord gives consent on November 30, that landlord cannot collect a pet bond. If the landlord gives consent on December 1, that’s fine.”

Ask tenants to cover the difference when a property is re-let at a lower rent

Gibbon said landlords generally could not ask tenants to pay the difference in rent if they broke a fixed term and the property could not be rented again for the same amount.

“Especially in this market, I’m seeing with market rent going down and tenants trying to get out of fixed-term tenancies, trying to break their lease early, I’m seeing some landlords and property managers try to charge the rental differential because they can’t get the 2024 level of rent in 2025.

“Even though there are some rare exceptions [where] the Tenancy Tribunal has found that the landlord can charge that, those are really quite unusual.

“The law provides for you to charge reasonable expenses that you incur because of the early break but you can’t charge the rental differential because the loss of income is not an expense.”

In a case the tribunal heard, a tenant broke a fixed term that was due to end in December this year in April.

The property was re-let on 5 June and the tribunal said the tenant could be required to pay rent until then.

But while the new tenant was paying $10 less a week, the adjudicator said the former tenant could not be required to cover this because the landlord did not provide enough evidence that the drop was necessary.

“The landlord would need to show that the lower rent was reasonable in the circumstances and that all reasonable steps were taken to achieve the best rent possible. Without this evidence the claim for rent loss is dismissed.”

The adjudicator also said a break fee could not be charged. “The landlord can only claim reasonable costs that are directly related to finding a new tenant. The landlord must provide evidence of these costs. The only cost that the landlord was able to prove was the Trade Me advertisement which I have awarded.”

Take tenants’ possessions

Landlords cannot take tenants’ possessions to cover money they are owed.

In one case involving a Beach Haven property, a landlord who had been sending the tenant “derogatory and racially suggestive messages”, according to the tribunal, entered the premises, threw the tenants’ belongings out, handed them a bill and took their $4000 computer.

The landlord was told to pay $1500 for breaching the tenant’s quiet enjoyment and $3000 for the possessions.

Let rent arrears add up

If a tenant falls behind on rent, the landlord cannot let the arrears mount unreasonably.

The Residential Tenancies Act says when either party breaches the agreement, the other party needs to take reasonable steps to limit the damage or loss.

Gibbon said that duty to mitigate loss meant landlords had to act quickly on arrears.

She said sometimes people would think that their landlord was being nice by not chasing them, and might be complacent. “If that gets piled up it could tip the legal test and the tribunal could very well say essentially you’ve not done anything about it, you’ve not given a 14-day notice, you’ve not sought to terminate the tenancy, you’ve not initiated an installment plan to get yourself compensated… we’re not going to award you all the rent that’s owed to you.”

Not pass on bills in a timely way

Gibbon said people also needed to ensure tenants received bills promptly.

“In Auckland you get billed by Watercare and you’re supposed to pass the usage fee to the tenant each month… you have to on-charge it to your tenant reasonably quickly. I’m seeing landlords who sit on it for months and months or even years then at the end of the tenancy go ‘oh by the way you owe me this much’, like thousands of dollars in water. They can’t do that.”

Leave the country for more than three weeks

Any landlord who leaves the country for more than 21 consecutive days needs to appoint an agent to act for them.

Bungle cabin questions

Gibbon said there could also be problems with tenants wanting to install a cabin.

“If the cabin is a vehicle it’s not really a Residential Tenancies Act issue and to withhold consent or attach conditions to that consent, as landlords sometimes think they’re entitled to, is a breach of the tenant’s quiet enjoyment. But on the flip side, not all cabins or caravans or tiny homes can be brought on to the property by the tenant without the landlords’ consent. It’s complicated.”

She said people should get legal advice.

Retaliate

Landlords can’t give notice to tenants or raise rent in retaliation for anything they have done.

In one case, tenants were given notice in June that a family member was going to move back into their property.

But they said it was prompted by a dispute, including issues about the rent and the healthy homes rules.

“Where there is a short period of time between the tenant raising an issue about the tenancy (or filing a claim) and the landlord serving a notice, this may lead to a strong inference that the landlord was at least partly motivated by the tenant exercising their rights. In this situation, the evidential onus shifts to the landlord to show that there was a legitimate reason for the notice,” the adjudicator said.

“In my view the fact that the landlords served notice the day after the case management conference held in this matter, at which the tenants itemised their claims in some detail, leads to a strong inference that the landlords were at least partly motivated by the tenants exercising their rights.”

The tenants were awarded $1500.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

National’s announcement that it would push up contribution rates for KiwiSaver to a total 12 percent is a good step – but there is a major flaw that needs fixing first, one KiwiSaver provider says.

Prime Minister and National leader Christopher Luxon said on Sunday that if it was re-elected next year, the party would gradually increase KiwiSaver contributions to match the Australian 12 percent rate by 2032, with 6 percent contributions from both employers and employees.

It has already started a process to increase the default rate to 4 percent plus 4 percent by April 1, 2028.

“Smaller retirement balances present a challenge for New Zealand as a whole, too, as we rely more on investment from offshore to fund the infrastructure, start-ups, and housing we need to grow our economy, create jobs and lift incomes,” Luxon said.

“If we’re serious about building the future, and I am, it’s time to aim higher.”

Rupert Carlyon, founder of Koura KiwiSaver, agreed contribution rates were not high enough.

He calculated that with a return of 5.5 percent a year and 12 percent contributions, a 21-year-old could end up with $2.13 million in their account at 65, compared to $1.08m at a 3 percent plus 3 percent rate.

Even a conservative investor could end up with another $370,000 as a result of the change, and a balanced fund could have more than $500,000 more.

But he said a big problem was that employers could dodge the increase by moving employees to total remuneration packages.

Under a total remuneration package, an employee is told that a certain amount of money is available to them and they can make their KiwiSaver contributions out of that, or use it as take-home pay.

These have been highlighted as a problem by many providers and the Retirement Commission, who want them banned.

Carlyon said as contribution rates got higher, more people might be tempted to shift over.

“An economically rational person would be better taking the cash in hand rather than opting to have 12 percent of your salary locked up until the age of 65. Without incentives, this policy has the potential to achieve the opposite of what we want – people will be actually discouraged from investing in their KiwiSaver.”

He said employers could not put people on to total remuneration contracts simply to avoid the increase. “But they will be able to turn around, and I suspect to a lot of employees they’ll say ‘hey what do you want to do if you want I’ll give you cash from now on’… they’ll use this as an excuse to move a lot of contracts to total remuneration.”

Carlyon supported calls for a ban on total remuneration. “Admittedly it will put a burden on the private sector but actually it’s a nice fiscally neutral way to incentivise people to save for their retirement.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand