Two Christchurch car rental companies have been ordered to pay $43,710 in fines and reparations for ripping off foreign tourists, prompting a warning from the Commerce Commission that it is watching the tourism sector closely.

Directors of both companies, Kylee and Gary Harris, plead guilty to 18 charges of breaching the Fair Trading Act by:

* Telling customers they had damaged cars when they had not.
* Lying about repairs to rental cars that hadn't been done.
* Levying charges that had not been disclosed.
* Promising late model cars but then supplying cars up to eight years old.
* Saying they were "Qualmark" endorsed when its membership had lapsed months ago.

The Commerce Commission, which brought the prosecution against Affinity Car Rental New Zealand and Euro Car Rental New Zealand, has warned that this kind of behaviour risks damaging our international reputation among tourists - especially with the Rugby World Cup coming next year.

Kate Morrison, general manager of enforcement at the Commerce Commission said that many consumers, especially overseas visitors, made their decisions on what rental car company to use well in advance of their arrival here so it was particularly important that information available on websites was accurate.

"Many of the consumers who were affected by the misleading information were visitors to New Zealand. The car rental industry is a central part of New Zealand's travel sector. It is important that businesses compete fairly, and that consumers, particularly those from overseas, are not disadvantaged by misleading or deceptive conduct," said Morrison.

"When businesses do not compete fairly and mislead consumers, New Zealand's image as a tourist destination is harmed." she said.

"As the country prepares for the increasing number of overseas visitors expected for the Rugby World Cup, the Commission is paying particular attention to those sectors providing goods and services to tourists to encourage compliance with competition and consumer legislation," said Morrison.