Which advertising practices are prohibited under the Fair Trading Act?

Prepare for the New Zealand Consumer Law Exam. Enhance your knowledge with multiple choice questions, detailed explanations, and study resources. Get ready to ace your test!

The Fair Trading Act in New Zealand is designed to protect consumers by promoting fair trading practices and prohibiting misleading or deceptive conduct in advertising and marketing. The correct aspect here is the prohibition against misleading or deceptive advertising, which is central to maintaining trust and fairness in the consumer marketplace.

Misleading or deceptive advertising can take various forms, including false representations about a product’s quality, price, or benefits. The Act puts the responsibility on businesses to ensure that their marketing claims are truthful and not misleading, providing consumers with accurate information to make informed purchasing decisions. By prohibiting such advertising practices, the Act aims to prevent businesses from gaining an unfair advantage over competitors and ensures that all consumers are treated fairly.

The other options do not represent prohibited practices under the Fair Trading Act; disclosing all product information, encouraging honest customer feedback, and making clear comparisons with competitors are considered positive practices that align with transparency and honesty in advertising. These practices help consumers make well-informed choices and foster a competitive marketplace grounded in integrity.

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