New Zealand Law Society - Fujitsu fined $310,000 in groundbreaking case

Fujitsu fined $310,000 in groundbreaking case

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Heat pump supplier Fujitsu General New Zealand Ltd has been fined $310,000 for making unsubstantiated or misleading claims about the energy efficiency and performance of some of its heat pumps.

Fujitsu pleaded guilty to seven charges under the Fair Trading Act (FTA) for unsubstantiated or misleading claims made over a period of more than two years, from June 2014 to October 2016.

This is the first time that a business has been convicted and fined for making unsubstantiated representations since the substantiation provision of the FTA came into effect in 2014. A representation is unsubstantiated if the trader making it does not have reasonable grounds for the representation at the time it was made.

On its website and in promotional pamphlets, Fujitsu made claims such as “NZ’s most energy efficient heat pump range” and that a particular heat pump range delivered “better heat efficiency” and constituted “the most efficient system ever”.

Fujitsu had no reasonable grounds to make those claims at the time of publication.

Fujitsu also made false or misleading claims that its e3 heat pump delivered “$4.92 heat for a $1 power” and that it was a “breakthrough energy saver – delivers $4.57 of heat for every $1 of power used”. 

That performance was achieved only under laboratory conditions and was not likely to be achievable by consumers in real-world conditions.

In sentencing in the Wellington District Court, Judge Ian Mill said “the dissemination of information was significant and significantly inaccurate” and that "all the facts must have been known to the defendant company including the limitation of the test results.”

“The conduct involved bold claims about superiority and energy efficiency, made in persuasive terms by a well-known and reputable manufacturer. Claims about efficiency are important to consumers who may be cost-conscious but also concerned about the environment. The efficiency of these heat-pumps was represented as a key selling feature, but without a proper scientific foundation for the claims,” says Commissioner Anna Rawlings.

Fujitsu is the first company convicted and fined under the unsubstantiated representations provision of the FTA. In November 2015 the Commission issued a warning to Baa Baa Beads after it failed to substantiate its claims about the therapeutic benefits of its Baltic amber products.