Australian Consumer Law Review
Key points you need to know | May 2018
There’s a lot of buzz around the Australian Consumer Law (ACL) Review and if you run a business in Australia, you need to know about it! Whether you work with customers, businesses, provide services or sell goods, it's important to know your rights and obligations and how the consumer laws affect your business.
Information below compiled by Barbara Geens | Standards and Regulatory Policy Advisor for AFC
The Australian Consumer Law (ACL)
The ACL is a national, generic law which applies in the same way to all sectors and in all Australian jurisdictions. This means that all consumers in Australia enjoy the same rights and all businesses have the same obligations, irrespective of which state or territory they engaged in transactions.
The ACL covers general standards of business conduct, prohibits unfair trading practices, regulates specific types of business-to-consumer transactions, provides basic consumer guarantees for goods and services, and regulates the safety of consumer products and product-related services.
The ACL is legislation, that every business owner should be familiar with. For more information and practical guidance see here.
Australian Consumer Law Review
In June 2015 consumer affairs ministers agreed that Consumer Affairs Australia and New Zealand (CAANZ) would conduct a review of the Australian Consumer Law (ACL).
Public consultation formed a core component of this review by providing opportunities for interested stakeholders to have their say on whether the law is working effectively and what could be improved. It included over 130 face-to-face consultations with stakeholders across Australia, including individual consumers and businesses, consumer advocates, industry bodies, legal practitioners, community legal centres and academics.
The review concluded in March 2017 with CAANZ providing consumer affairs ministers with a Final Report. The report was published on 19 April 2017, and is recommending 19 different amendments . Parliament has responded to the Final Report by releasing an exposure draft amendment bill  and an amendment bill on penalties.
The Penalties Bill
The most significant change proposed in the Penalties Bill is increasing the maximum penalties under the ACL to align them with the penalties that apply under Part IV of the Competition and Consumer Act 2010 (Cth).
The current maximum civil pecuniary penalty, and fine for criminal offences, under the ACL is $1.1 million for a corporation or $220,000 for an individual.
The Penalties Bill responds to the recommendations by CAANZ by significantly increasing the maximum civil pecuniary and criminal offence penalties that apply to corporations from $1.1 million to the greater of:
- $10 million; or
- if the court can determine the total value of the benefit obtained from the offence, three times the value of that benefit; or
- if the court cannot determine the value of the benefit, 10% of the corporation’s annual turnover in the preceding 12 months.
The Penalties Bill increases the maximum penalty for individuals from $220,000 to $500,000.
These increases will apply to most provisions under the ACL which attract a fine or pecuniary penalty for breach, including provisions relating to unconscionable conduct, unfair practices (such as making false or misleading representations), referral selling, non-compliance with a recall notice and various product safety provisions. The clear message is that breaches of the ACL provisions are to be viewed as seriously.
Most of the changes in the Penalties Bill will, if passed, take effect by 1 July 2018.
ACL Amendments Bill - Recalls and Disclosure Notices and more
In August 2017, Consumer Affairs Ministers agreed to a package of 14 legislative reforms proposed by the Final Report to improve the operation of the Australian Consumer Law (ACL).
The related exposure draft included amendments to:
- clarify existing provisions relating to consumer guarantees, voluntary recalls, unsolicited consumer agreements and false billing;
- enhance the regulators’ information gathering powers for investigations in relation to product safety and unfair contract terms;
- extend the unconscionable conduct protections to publicly listed companies;
- expand the remedies available to the courts for contraventions of the ACL; and
- improve price transparency.
For details see also: https://treasury.gov.au/consultation/t257313/
Australian Consumer Law Review Bill has been introduced into Parliament in March 2018 without the proposed voluntary recall amendment.
For More Detail
- Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
- Text of bill - First Reading
- Explanatory Memorandum - NB, you can see a summary of key features in pages 7 & 8 of this document