The Commerce Commission has put personal tax summary intermediaries (PTSIs) on notice that they may be failing to meet their obligations under the Fair Trading Act.
PTSIs are a type of tax refund agent that process income tax refunds for salary and wage earners. They typically offer their services through temporary locations at shopping centres, as well as over the internet.
The Commission has written to 30 PTSIs urging them to take a good look at their websites and marketing practices. The Commission is insisting PTSIs clearly disclose crucial information about the cost of their services and any ongoing contractual relationship with customers.
Stuart Wallace, Competition Branch Manager, said the Commission had received a number of complaints from members of the public that showed there were compliance issues with PTSIs.
The Commission's investigation revealed that some PTSIs may be:
? failing to adequately disclose what it costs consumers to use their services - including making claims there is 'no charge' when customers have to pay the costs of processing any refund they are entitled to
? obliging consumers to use their service in future years, without making this clear or explaining how to get out of this obligation
? making misleading claims about turnaround times.
Mr Wallace said that PTSIs had emerged since salary and wage earners were no longer required to file returns.
"They offer to apply for any personal income tax refund on behalf of their customers and then take a cut from those refunds before passing them on," Mr Wallace said.
"Our general advice to consumers is that they can find out for free whether they are entitled to a refund and apply for it themselves through Inland Revenue. But if consumers do choose to use a PTSI, we want to be sure they are being given accurate information."
The Commission has advised PTSIs that it will continue to monitor the industry and will take further action if necessary against any PTSIs that fail to comply with the Fair Trading Act.
Compare Credit Cards - Independent interest rate and fees comparisons for New Zealand banks.