Businesses selling products or services to consumers in Australia must comply with the Australian Consumer Law (ACL). The ACL is the national law for fair trading and consumer protection. Implementing a compliance program to meet consumer law obligations is an important risk-mitigation strategy for any business. In this article, we explain the role of a compliance program and how to implement one within your business.
What is a Compliance Program?
A compliance program is an internal system to achieve each of the following outcomes:
- identify and reduce the risk of breaching the ACL by putting in place effective procedures and systems;
- remedy any possible breaches that arise;
- create and promote a culture of compliance with the ACL at all levels within the business; and
- identify ways to enhance the organisation’s overall compliance culture.
Why is a Compliance Program Valuable?
Organisations sometimes breach the ACL. In this situation, the court will take into account whether the business has an operational compliance program when it determines the severity of a penalty. A compliance program is a valuable tool. It demonstrates an organisation’s commitment to meeting its obligations.
In addition to the value courts place on a compliance program, such a program also helps to protect your business against statutory authorities that investigate Australian businesses. The Australian Competition and Consumer Commission (ACCC) is Australia’s peak independent statutory government authority responsible for enforcing the ACL.
The ACCC can require that a business implements a compliance program to prevent future breaches of the ACL. It can also require businesses to review and improve their trade practices as well as request the organisation reviews its internal program if the ACCC considers it inadequate.
Preparing Your Compliance Program
You should integrate an effective compliance program into your business plan. In fact, you should give the program the same priority as the key divisions of your business, including marketing, sales, finance or operations. However, if you do not have the resources to develop a tailored compliance program, there is assistance available to you. The ACCC has provided a series of templates for businesses that need help.
There are four templates which can be used and each is ranked by levels and reflects the size of the business. Level 1 is for micro-businesses and Level 4 is for large corporate entities. The templates are a valuable resource. However, it would also be helpful to seek assistance from a lawyer. This will ensure that the compliance program is fit for purpose and adequately manages your risk.
It is prudent for businesses to implement a compliance program that assists them to meet their obligations under the ACL. Breaches of the ACL can result in substantial fines, litigation and negative publicity for a business. At LegalVision, we can assist your business with preparing and implementing an effective compliance program. We work closely with your business to deeply understand your operations and tailor the right solution for you.
If you have questions about your obligations under the ACL, get in touch with LegalVision’s competition lawyers on 1300 544 755 or fill out the form on this page.
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