- Australian Consumer Law is regulated by the Competition and Consumer Act 2010. This legislation reflects most of the consumer protection provisions of the fair trading legislation in each state and territory.
- The ACL is administered by the Australian Competition and Consumer Commission, and the State and Territory consumer protection agencies.
- There are some protections available to consumers including a ban on misleading and deceptive conduct and unconscionable conduct.
Consumer Protection in Australia
The Competition and Consumer Act 2010 (Cth) applies the Australian Consumer Law as the law of the Commonwealth to the conduct of corporations. Schedule 2 of the Act applies as a law of the Commonwealth to the conduct of corporations. Even if an employee breaches the Act, this is considered an act of the corporation (imputing conduct to a corporation). However, it is necessary to establish the state of mind of a body corporate. It is sufficient to show that a director, employee or agent acting within the actual or apparent authority, had the relevant state of mind.
Misleading or Deceptive Conduct
Under the Act, a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. Conduct is misleading or deceptive when it “leads into error”. The alleged conduct to be misleading or deceptive must occur in the context of activities bearing a trading or commercial character. Examples of categories of misleading and deceptive conduct:
- Comparative Advertising
- Character Merchandising
- Silence and Failure to Disclose
- Unfulfilled Contractual Promise
- Future Representations and Opinions
Unconscionable means doing what is irreconcilable with what is right or reasonable. Factors include the bargaining positions of the supplier and the consumer, the consumer conditions to protect the supplier, and undue influence or pressure.
Unfair Contract Terms
A contract may be void if its terms are unfair and forms part of a standard form consumer contract. A party to the contract or the ACCC may apply to the court for a declaration that the term is ‘unfair’. An unfair term is usually identified if there is a significant imbalance or detriment to one of the parties.
There are some unfair practices under Australian Consumer Law:
- Unsolicited Supplies
- Pyramid Selling Schemes
- Pricing Conduct
- Referral Selling
- Harassment and Coercion
A breach of the Australian Consumer Law for unfair practices carries both criminal and civil consequences.
- In identifying misleading or deceptive conduct, the class of consumers toward whom the allegedly misleading conduct must be identifiable.
- The ACCC can bring representative actions on behalf of one or more people who suffer loss or damage as a result of defective goods. .
- Each state and territory has specific legislation that applies to fair trading and consumer protection. Under the Commonwealth, Schedule 2 to the Competition and Consumer Act 2010 applies.
Remedies and Limitations
A private party that has suffered loss or damage as a result of unconscionable conduct may seek injunctive relief (s 232) or damages (s 236) as well as other orders. The ACCC may seek the imposition of civil pecuniary penalties for a contravention of sections 20, 21 and 22: s 224(1)(a)(i) ACL. The ACCC may also issue infringement notices about the conduct: s 134A(2)(a) CCA.
Unfair Contract Terms
Damages (ACL s 236) and compensation orders (ACL s 237) can be sought. An injunction can be sought if the other party is claiming it is an unfair term.
Private remedies are available under the consumer guarantees regime or conduct under Chapter 5 of the Australian Consumer Law. Injunctions and damages are available as remedies.
Action must be brought within three years after the person became aware, or ought reasonably to have become aware, of all of the alleged loss or damage, the safety defect of the goods; and the identity of the person who manufactured the goods. A defective goods action must be commenced within ten years of the supply by the manufacturer of the goods to which the action relates
Frequently Asked Questions about Consumer Protection
Q: What is a Commonwealth entity as defined in the Act?
A: An entity is considered a body corporate established by a Cth or State statute; or an incorporated body in which either the Cth or state or a statutory corporation of the Cth or State has a controlling interest.
Q: What is a consumer contract?
A: A consumer contract is for a supply of a good or service for personal, domestic or household use or consumption.
Q: What is an unsolicited consumer agreement?
A: An agreement is an unsolicited consumer agreement if it is for the supply, in trade or commerce, of goods or services to a consumer; and it is made as a result of negotiations between a dealer and the consumer in each other’s presence at a place other than the business or trade premises of the supplier of the goods or services; or by telephone.
Q: What defines a consumer?
A: Under the Australian Consumer Law, the good or service must be valued under $40,000.
Q: What is considered a safety defect?
A: Goods have a safety defect if their safety is not such as persons are entitled to expect.
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