Australian Consumer Law

Date: Apr 01, 2011
Document Type: Newsletter

Since 1 January 2011, all Australian businesses have been operating under a new, national consumer law.  The Trade Practices Act 1974 (Cth) has been renamed the Competition and Consumer Act 2010 (Cth).  Schedule 2 of that statute sets out the new Australian Consumer Law (ACL).  The ACL replaced provisions in 20 national, state and territorial consumer laws dealing with the obligations of business and the rights of consumers when selling goods and services.  There is now a single, national set of rules.

The Australian Consumer Law applies to all business sectors and covers general standards of business conduct.  It regulates specific types of business to consumer transactions, prohibits certain practices, regulates the safety of consumer products and provides basic consumer rights for goods and services.

The Australian Consumer Law will be administered and enforced by the Australian Competition and Consumer Commission (ACCC), state and territory consumer protection agencies, as well as the Australian Securities and Investments Commission (ASIC).

The ACL is intended to provide uniform national consumer law provisions.  Existing prohibitions against misleading conduct, unconscionable conduct and false and misleading representations have been relocated to the Australian Consumer Law but were largely unchanged in substance.

The ACL also includes a number of new provisions including:

  • new consumer guarantees when buying goods and services;
  • expanded prohibitions regarding the making of false or misleading representations
  • new, national provisions on information standards which apply to both goods and services;
  • a new regime prohibiting unfair contract terms in standard form consumer contracts;
  • a single national product safety regime;
  • a new national law for unsolicited consumer agreements, which replaced state and territory laws on door-to-door sales and other direct marketing;
  • simple national rules for lay-by agreements; and
  • new penalties, enforcement powers and consumer redress in respect of consumer protection contraventions.

It is important to understand the implications of these changes for your business.  Businesses should review the way they interact with consumers to ensure they comply with new legislation.

Penalties for engaging in unconscionable conduct or making false or misleading representations can range up to $1.1 million for corporations and $220,000 for individuals.  The new legislation also gives the ACCC a number of enforcement powers.

The ACCC can also seek orders disqualifying individuals from managing corporations for contravention of some consumer protection provisions.  It can also seek redress for consumers who have suffered a loss or damage due to a contravention of the consumer protection provisions.

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