We trust them because they are supposed to be the experts. But how do we know we aren't being ripped off by that tradesman or saleswoman? And what can we do if we think our ticket has been unfairly clipped? Bruce Munro takes a look.
She went to the bike shop to buy brake pads. In terms of safety, brake pads are among the most important components on a bike. So it was a small, cheap, but important bit of maintenance.
That was not how it turned out.
The cycle mechanic sold him the brake pads, all right. But he also tested the brake levers, spun the wheels and shook his head. The brakes needed bleeding and the wheels aligning, the cyclist was told.
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By the time the bike owner left the store, the bill had ballooned from $30 to $90 and his mood was seriously deflated. He was no cycle expert, so there had been little option but to take the mechanic at his word.
But had the extra work and expense really been needed? How did he know he hadn't just been taken for an unnecessary and painful ride?
Last month, the Government announced an extra $15.2 million over four years to help the Commerce Commission better protect consumers from unscrupulous business practices.
''With this increased focus on education, compliance and enforcement, New Zealanders ... will have more protection from businesses using dishonest practices while enabling honest traders to compete on a level playing field,'' Commerce and Consumer Affairs Minister Paul Goldsmith said.
It is a comforting move. But also a sign there is a problem that needs addressing. The size of the problem is unclear.
Neither the Citizens Advice Bureaux (CAB), which run consumer issues teams in centres throughout the country, nor the Disputes Tribunal, which deals with claims including those under the Consumer Guarantees Act and Sale of Goods Act, keep statistics on the number and type of cases they deal with.
They do, however, have some examples of consumers in distress.
From the Disputes Tribunal, in late 2014, comes the case of a house seller who authorised a real estate agent to spend up to $2500 on marketing their property before auction.
The auction was cancelled but the seller was presented with a bill for the full amount.
A claim was lodged with the tribunal, which ruled the real estate agent had not provided the full service and so was overcharging the seller by $1396.80.
The opposite problem is one that Kevin Flaherty and fellow members of CAB Dunedin's consumer issues team see regularly.
''The most common situation we encounter is work being done which hasn't been agreed to,'' Kevin Flaherty says.
''For example, someone takes their car to a mechanic, who gives a quote, and they agree on the price. But then the mechanic does more work without asking the car owner, and then presents them with an unexpectedly large bill.
''We get these sorts of cases throughout the year. And it's not just mechanics. It's across the board. Builders, plumbers, electricians ...''
Mr Flaherty believes there are ''a lot of robber barons out there'' who will ''try it on if they can''.
''And sometimes they get away with it''.
He and others who deal with consumers have some advice to help people avoid being stung, or, if their ticket has already been unfairly clipped, to get redress.
Consumers are only obligated to pay the agreed price, says Mr Flaherty, referring to the example of the car mechanic.
If no price has been agreed to, then the bill cannot be for more than what is reasonable for that type of goods or service.
Take, for example, the case of a watch repair publicised on consumer watchdog television programme Fair Go.
A woman took her mother's Cartier watch to be repaired, for which she was quoted $1650.
Shocked, the woman made inquiries and discovered the jeweller who gave the quote was going to send the watch to another jeweller who would send it to the authorised repairer in another city.
The repairer would charge $800 while the others would clip the ticket for $400 each.
Mr Flaherty says there is nothing illegal in that, as long as the woman has accepted the $1650 quote and the mark-ups are normal for the industry. But, by getting more than one quote, the watch repair was done for less than half the original price.
''We recommend people get two or three quotes,'' he says.
It is imperative that consumers know their rights and then exercise them. That is the opinion of Sue Chetwin, chief executive of consumer advocacy organisation Consumer New Zealand.
''We have quite good laws to assist consumers to assert their rights,'' Ms Chetwin says.
''But the fact of the matter is you do have to assert them.''
Despite a law change intended to better protect consumers, extended warranties are still a bugbear for Ms Chetwin.
''You just don't need them,'' she says.
''The shop is now obliged to tell you about the warranty: what it does, what benefits it offers over and above the Consumer Guarantees Act.
''The stores now call them all sorts of other things. They don't call them warranties any more. We still say you have good protection under the Consumer Guarantees Act; you don't need them.''
She also encourages consumers, when they are being given the hard sell, to ask the salesperson whether they get a commission for selling that product or whether their advice is an independent recommendation.
The same basic consumer protections and advice hold true in the online world, Jon Duffy, who is Trade Me's manager of trust and safety, says.
''If it's too good to be true, it probably is,'' Mr Duffy warns.
But online buying does have a couple of distinctive tricks for young players, he adds.
People are quick to complain when they think they have not been treated fairly. So, a seller's feedback rating can indicate whether or not they are good to deal with.
As a buyer, do not put your cellphone number online in an attempt to make direct contact with the seller, Mr Duffy says.
Online auction sites discourage this because it can be used to circumvent seller fees. But also because it can help fraudsters rip off consumers.
''There is a method of scamming out there that we call text-scamming,'' Mr Duffy says.
''If you put up your phone number, anyone can see it and phone you and say, for example, `I'm the seller of that i-Phone ... Put $700 in this bank account and I'll send you the phone'.
''We've had people fall victim to that. And there's very little we can do to trace it.''
When things do go wrong and cannot be rectified, the cheap, effective but little understood last-port-of-call is the Disputes Tribunal.
Some people think it is just a mediation service, others question the quality of its referees, but many simply do not know enough about it to consider it an option.
Disputes tribunals are not like formal courts, Anne Darroch, who is the principal disputes tribunal referee, says. A lawyer cannot represent you and there are no judges. A referee hears the dispute, applies the relevant laws and makes a binding decision.
''Today, 85% of our referees are actually lawyers,'' Ms Darroch says.
The Disputes Tribunal can hear disputes valued up to $15,000, or $20,000 if both parties agree. A proposal, yet to go to Parliament, would lift the limit to $30,000.
Based on her years of hearing cases, Ms Darroch says people could save themselves a lot of pain by considering the ''what ifs''.
''I say to people, `When you got into this contract you had no idea it was going to wind up here'. I guess we hope for the best and don't even think about what could go wrong.
''It's always important to get things in writing, and to keep emails and text messages. It's commonsense stuff. But often people haven't kept any record of communication.''
Consumers could do a lot to protect themselves, or ensure they got a fair remedy, if there were ''a few more 'what ifs' at that early stage'', she concludes.
Ethics aside, SMEs must 'clip the ticket or die'
Do not confuse unethical practices with legitimate and necessary "clipping the ticket'', business adviser Deon Aldridge warns.
Clipping the ticket is simply charging for reasonable costs as part of the supply chain, Mr Aldridge, of Hebron Business Game Changers, says.
Take, for example, a property manager who organises a plumber to do a repair.
"Does the property manager charge the property owner exactly what the plumber charges or does he clip the ticket?''
Dunedin-based Mr Aldridge says.
"Quite a bit of work is done by the property manager, organising the plumber and checking the job is done properly. So, it's entirely appropriate that the cost is recovered.''
Mr Aldridge cites an example of a company with an annual turnover of millions of dollars that was in financial trouble because all of its bills had no mark-up.
"They passed the whole lot on to the clients at cost, thinking they were being good guys, but they were killing themselves.
"It's clip the ticket or die. Because if you just Hoover up all those costs yourself, you are not going to make it.''
Some consumers think all mark-ups are exorbitant without stopping to think about it, Mr Aldridge says.
"You go to a restaurant and order a soft drink. Clearly the cost of that glass is double the price of a whole bottle. What's going on? That ticket has been clipped severely.
"But the truth is, it has to be because it has to pay for the venue, lights, music, labour and everything else. That money comes from clipping the ticket. It can't come from anywhere else.''
Businesses that do clip the ticket exorbitantly do not get away with it for long, "because it is so competitive out there''.
There is a misconception that small to medium-sized businesses are "rolling in it''.
That is far from the reality, Mr Aldridge says.
"For most small to medium businesses, the net profit is ridiculously small. You have to have courage, be highly accountable and ensure that everything you do brings in a return.
"This notion of clipping the ticket has to be seen for the necessity that it is.''
Know Your Rights
Consumer Guarantee ActRetailers and other such suppliers guarantee their goods will:
• Be of acceptable quality.
• Be fit for a particular purpose that you asked about.
• Match the description given in advertisements or sales brochures, or by the sales assistant.
• Be a reasonable price, if no price or pricing formula has been previously agreed.
• Be delivered on time, where the supplier is responsible for delivery.
• Service providers guarantee their services will be:Performed with reasonable care and skill.
• Fit for the particular purpose they were supplied for.
• Completed within a reasonable time.
• A reasonable price, if no price or pricing formula has been previously agreed.
- Consumer New Zealand
