A New Zealand water filter company has been fined $440,000 after pleading guilty to making unsubstantiated claims about the benefits of its products and for making misleading claims about the quality of New Zealand’s home water supply.
The unsubstantiated claims made by HRV Clean Water Limited (HCW) related to the ability of a magnetic "ionizer" in its water filter systems to soften water; the benefits that consumers could expect after using the water filters; and the water filters' ability to reduce skin conditions, such as eczema and dermatitis.
HCW admitted to the Commerce Commission that the information available to it when it made the claims did not provide reasonable grounds for doing so.
In addition, HCW was found to have made misleading representations about the quality of water and about additives in New Zealand’s home water supply, and the need for consumers to buy a water filter to address this.
The Commerce Commission said the unsubstantiated claims were made on HRV's website between 2 July 2014 and 12 October 2017, in promotional materials and to customers and the public at presentations.
They included statements that the filters would "reduces skin irritations, dermatitis and eczema" and "removes existing lime scale and extends the life of your appliances".
Commissioner Anna Rawlings said the information available to HRV did not provide a reasonable basis for a number of the performance claims it made.
"HRV did not have reasonable grounds to claim the filter could soften water through its magnetic process. HRV relied heavily on the information provided by the supplier without getting this verified by an expert," she said.
"Although HRV had some testing done, the results did not provide a reasonable basis for the various claims it had made – and continued to make – about the benefits of using the filters."
HCW also misrepresented the state of New Zealand's domestic water supply.
This included the claim that "90 per cent of our water ways are polluted below swimming standards, yet this is where we source our water from", and that the filter would "remove many of the additives, as well as funny tastes and smells from your water supply".
Ms Rawlings said these misleading statements likely created concern among consumers that a water filter was needed to improve the quality of their home water supply.
"The impression that a reasonable consumer would take from these claims is that without treatment, using the water supplied to New Zealand homes carried health risks. This was not true," she said.
In response HCW say they accept the fine and have "put in place additional processes to ensure tighter control over marketing material in the future."
The fine was issued by Judge John Macdonald in the Auckland District Court on October 19.