The Australian Consumer Law (ACL) was introduced in 2010 under the Competition and Consumer Act 2010 (Cth). All businesses who are providing goods and services to consumers, or even businesses, should be aware of the ACL as government bodies can flexibly enforce the legislation.
The main enforcement agencies include the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC). The states and territories, of course, also have state-based legislation and enforcement bodies, including fair trading agencies.
The ACL introduced new powers for the ACCC to investigate and enforce non-compliance issues with the legislation. One of the enforcement strategies included the issuing of a substantiation notice. A substantiation notice requires non-compliant businesses to provide proof of the truth of any claims or representations they have made to consumers. This is primarily focussing on a business’ promotional material and includes any claims that a consumer is led to believe about a certain good or service.
If your business has received a substantiation notice, it is worthwhile to have information ready justifying why any representations you have made are true. This may include scientific reports of the claim and its validity, market research analysis or general information that shows proof of the substance of your claim.
If you have been issued with a substantiation notice, you will usually have within 21 days to provide this information. This will be analysed by the ACCC and may result in a fine or an infringement notice if the details provided are not sufficient enough to substantiate your claims.
Public Warning Notices
A public warning notice is one of the harsher penalties that the ACCC can enforce. However, due to the detrimental impact this can have on a business, the ACCC needs to have clear grounds to issue a public warning notice. Further, for the ACCC to issue a notice, a person needs to have suffered, or is likely to suffer a detriment as a result of the business’ actions. In most circumstances, a public warning notice will not be issued unless it is in the public interest to do so.
If the ACCC have commenced an investigation or enforcement action, the matter may also end up in the Australian courts and tribunals for litigation. Other possible penalties include fines, civil pecuniary penalties or even criminal prosecutions if the breach is serious enough. For example, criminal prosecutions may arise from unsolicited consumer transactions or from the safety of consumer goods and product-related services. The fines vary for individuals or companies who have not complied with the legislation.
Australian Consumer Law: Tips for Compliance
As the ACCC’s enforcement actions have increased, it is important for businesses to understand their obligations under the ACL. It may assist to get the requisite training on your trading practices as well as passing this on to employees to ensure you know how to handle consumer complaints. Other tactics may include:
- Retaining documentation to substantiate any representations your business makes;
- Updating any legal documents or terms and conditions that are provided to your customers and;
- Monitoring your business’ compliance with the ACL regularly.
These are all effective ways to ensure your business complies with the ACL. Stronger enforcement mechanisms will likely encourage consumers to take up the opportunity to seek recourse. If you have received an infringement or a substantiation notice, or you simply want to find out what your ACL obligations are, get in touch with LegalVisioin’s consumer lawyers on 1300 544 755.