Changes made to the Victorian Fair Trading Act and other consumer protection laws at the end of 2004 give traders further reason to ensure that they have effective and up-to-date legal compliance programs.
One of the effects of the amendments is that traders who breach the Victorian Fair Trading Act can now be ordered to publish corrective advertisements and advertisements that acknowledge breaches of the law, or to establish fair trading compliance training programs. These remedies mirror those which are also available under the Trade Practices Act (Cth).
The amendments also confer new powers that could lead to Consumer Affairs Victoria (CAV) obtaining remedies not currently available to the Australian Competition and Consumer Commission under Federal legislation. For example, those who breach the Fair Trading Act could now be ordered by a Court to honour promises made in the course of misleading or deceptive conduct or in false representations.
Traders will need to be particularly mindful of this when using asterisks and disclaimers. Broad marketing 'headlines' in advertisements are often tempered by small print conditions such as conditions a consumer must meet to be eligible for an attractive offer, or explanations about what the marketing line really means. One possible outcome that could conceivably eventuate is if these small print conditions are not clearly disclosed and consumers are likely to be misled, the trader could be ordered to meet the claims without being able to rely on the exceptions and conditions.
The new remedy should also be on the minds of traders making comparative claims. Is the product being advertised really 40 per cent off regular price, and does the business really offer the lowest prices in town? If not, the trader might be ordered to sell the product at 40 per cent off whatever the real regular price is, and to genuinely offer lower prices than other stores in a particular area.
Obviously, the bad publicity associated with other remedies like corrective advertising could also be very costly and damaging to a trader's reputation. These new remedies are in addition to existing penalties and remedies, which include significant fines for some breaches, injunctions, and orders to pay damages.
These recent developments remind us that compliance should be at the forefront of the minds of all traders and businesses, and should be built into day-to-day activities. The Victorian Government has emphasised this, stating that its objective is an enforcement strategy under which compliance with consumer protection laws is seen as a matter for all sectors of industry. Traders therefore now have an added incentive to review and update their compliance policies and procedures—and to ensure that they take compliance as seriously as the legislators and regulators.
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Incoterms® 2010 will enter into force on 1 January 2011, but prudent traders, importers, exporters and other business people should start to review their trading documents and practices now to ensure that contracts are up to date by the time the changes take effect.
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