Essential Updates for Consumer Protection & Fair Trading
The Australian Consumer Law (ACL) stands as a vital national framework, ensuring consistent consumer protection and promoting fair trading across all states and territories. It is essential to understand the implications of both misleading conduct and unconscionable conduct. Administered by the Australian Competition and Consumer Commission (ACCC) and various state and territory regulators, the ACL guarantees consistent rights for consumers and clear obligations for businesses throughout Australia.
Who Does the ACL Apply To?
The ACL applies to conduct carried out “in trade or commerce.” It cover goods and services:
- for personal or household use, without a price cap.
- For some small business purposes (excluding goods intended for resale or manufacturing).
Core Protections Under the ACL
The consumer law provides strong legal safeguards to ensure a fair and transparent marketplace:
1. Prohibited Conduct
The ACL prohibits various forms of harmful or dishonest behaviour, including:
- Misleading or deceptive conduct (e.g. false or exaggerated claims in advertising) – Section 18 ACL
- Unconscionable conduct (e.g. taking advantage of vulnerable consumers or smaller businesses)
- Unfair practices (e.g. bait advertising, coercion, or pressure selling)
2. Unfair Contract Terms (UCT)
Significant legislative reforms have strengthened the prohibition against unfair contract terms under Australian consumer law:
- Standard form contracts used with consumers and small businesses (defined as those with fewer than 100 employees or turnover not exceeding $10 million) must not contain unfair terms.
- Unfair terms are now illegal, not just void, and may attract substantial penalties, including:
- Up to $50 million for corporations
- Up to $2.5 million for individuals
3. Product Safety & Recalls
- Businesses must comply with mandatory product safety standards and report unsafe goods to the ACCC within 2 days of becoming aware of a serious risk.
- The ACCC can initiate mandatory recalls, such as those seen for products with embedded button batteries.
4. Consumer Guarantees
Consumers have automatic rights when purchasing goods or services, including guarantees that:
- Products are of acceptable quality
- Goods are fit for their disclosed purpose
- Goods and services match their description or sample
Importantly, these rights apply regardless of price. Consumer guarantees also apply to many business-to-business transactions, unless goods are acquired for resale or commercial manufacture. Understanding your rights is fundamental to consumer law.
Critical Updates in Enforcement
The ACL has been strengthened with tougher penalties, broader coverage, and expanded enforcement powers for regulators. These changes significantly enhance the enforcement capabilities of the Australian Consumer Law.
- Penalty Increases:
- For corporations, maximum fines have increased to $50 million (previously $10 million).
- Individuals now face fines up to $2.5 million.
- Enhanced Small Business Protections:
- Unfair contract terms are now explicitly illegal (previously, they were merely void).
- These protections now extend to a wider class of small businesses, covering businesses with ≤100 employees or ≤$10 million turnover
- ACCC Investigative and Enforcement Powers:
The ACCC has a growing mandate to investigate digital conduct and enforce compliance in emerging markets. Key tools include:
- Substantiation notices which compel businesses to prove their claims in marketing (e.g. “eco-friendly” assertions).
- Infringement notices, including fines of up to $187,500 for false sustainability claims (“greenwashing”).
- Focus areas for ACCC enforcement include fake online reviews, online “dark patterns,” and misleading representations about digital product or services.
How Citilawyers Can Help
At Citilawyers, we assist both businesses and individuals in navigating their rights and responsibilities under the ACL. Our services include:
- Reviewing contracts to identify and remove unfair terms;
- Advising on consumer guarantee disputes, including defective products or substandard services;
- Representing businesses in ACCC investigations, including but not limited to matters involving alleged misleading conduct or product recalls.
- We provide legal consultation on all aspects of the Australian Consumer Law.
Contact us today for a consultation to ensure your business remains compliant with the Australian Consumer Law and to protect your consumer rights.
