On 1 January 2011 the Trade Practices Act 1974
(TPA) changed its name to the Competition and
Consumer Act 2010 (CCA) which incorporates the new
Australian Consumer Law (the new law).
What is it?
The new law is a unified national consumer law aimed at ensuring
consistency in the rights of consumers and obligations of
businesses across Australia.
It is administered by the Australian Competition and Consumer
Commission (ACCC); each State and Territory's
consumer agency; and in respect of financial services, the
Australian Securities and Investments Commission
The Trade Practices Amendment (Australian Consumer Law) Act
(No 1) 2010 (Cth) was the first part of the new law which
1.New enforcement powers for the ACCC
The ACCC and ASIC have an increased range of enforcement options
for consumer protection such as the ability to issue the following
notices or orders in contravention of certain CCA provisions:
infringement notices that contain a monetary
disqualification orders which prevent an individual
from managing a corporation for a period of time;
substantiation notices seeking additional information
where a person is suspected of making a false representation in
promoting goods or services in trade or commerce.
public warning notices where suspected contravention
concerns 'public interests' or there has been refusal or
failure to respond to a substantiation notice;
orders to redress loss or damage suffered by non-party
consumers which warrants a refund or contract variations.
2. New civil pecuniary penalties
Where it can be proven on the balance of probabilities, the ACCC
and ASIC can impose monetary penalties for various contraventions
of the new law of up to $1.1 million against corporations and
$220,000 against individuals. Note that it does not apply to
misleading or deceptive conduct.
3. New unfair contracts regime
The new regime applies to standard form contracts that are entered
into on or after 1 July 2010. In relation to existing
contracts, the changes will impact on terms that are renewed or
varied on or after that date.
The second part of the new law, the Trade Practices
Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth)
essentially replaced Parts IVA, V, VA and VC of TPA, and introduced
Sales / unfair practices law
The new law harmonises the existing laws from all states and
territories in relation to unsolicited supply of goods and
services; pyramid selling; referral selling; and, component
pricing. It also inserts additional provisions on multiple
pricing; lay-by agreements; proof of transaction and unsolicited
The new law regulates businesses when approaching consumers during
unsolicited sales and the content and formation of unsolicited
consumer agreements. The new law also requires a written
agreement to be provided to consumers which discloses basic
information, including cooling off periods, termination rights and
the total price of the sale. It covers door-to-door selling,
telephone sales and other forms of direct selling which do not take
place in a retail context.
Consumer guarantees reforms
The new law imposes substantially the same consumer guarantees law
under TPA but made the right of action in seeking remedies
statutory so that it cannot be excluded in the contract.
The appropriate remedy will depend on the guarantee breached and
the nature of the breach. Significantly, the ACCC can take
representative action for redress on behalf of consumers (with
written consent of consumers).
Product safety legislative regime
The new law imposes a national approach to mandatory safety
standards, safety interim or permanent bans, mandatory or voluntary
product recalls, and mandatory reporting and notification
requirements on goods or product related services. The concept of
reasonable foreseeable use or misuse is applied in the
Reference / Review
ASIC has released a specific consultation paper (CP135 June
2010) for the benefit of financial institutions in relation to
unfair contract terms in the context of mortgage early exit
A media ready reckoner on the ACL changes is available on the
ACCC media centre here
This article reflects the ACL as on 13 January 2011.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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