With effect from 1 January 2011:

  • The name of the Trade Practices Act 1974 (TPA) changed to the Competition and Consumer Act 2010 (CCA);
  • Most of Australia's consumer protection laws have been revised and moved from the state Fair Trading Acts and the body of the TPA to the Australian Consumer Law (ACL); and
  • The Australian Consumer Law came into full effect.

The changes affect nearly all businesses and require them to review their documents and conduct in some way. Contraventions of many of the new provisions carry heavy potential penalties.

A summary of key changes is set out set out below. For a detailed summary of the ACL changes click here.

Everything moves! Updating your documents

Any references to the "Trade Practices Act" and most references to state Fair Trading Acts need to be updated in all of your documents and agreements. As a general guide:

  • References to competition law provisions in the TPA become references to the same section number in the CCA; and
  • References to most consumer protection provisions of the TPA or Fair Trading Acts become references to corresponding provisions of the Australian Consumer Law. For example, section 52 of the TPA is now s18 of the ACL. Note that section numbering in the ACL is completely different to the TPA or Fair Trading Acts, and many provisions have been significantly redrafted.

Consumer Guarantees

The consumer warranties previously set out in the TPA and state Fair Trading Acts have been replaced by new statutory guarantees. These give consumers a range of new rights:

  • Consumers now have an explicit right to return products for a full refund if there is a 'major' failure to comply with a consumer guarantee;
  • There is now a statutory guarantee of 'acceptable quality' which includes a specific requirement that goods be 'durable'. This guarantee will be breached if goods fail sooner than a consumer would reasonably expect; and
  • Where goods are supplied in association with a related service (eg, a mobile phone sold on a plan), if the goods suffer a major failure and the customer returns the goods for a refund, the customer also has a right to cancel the associated service contract without penalty.

Manufacturer's warranties

From 1 January 2012, manufacturers' warranty documents must contain prescribed information such as the extent of the warranty, the manufacturer's contact details and the claim procedure. Warranty documents must also include the following words:

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

Companies who import or manufacture products with long lead times should start planning now to ensure that warranty documents in all products they stock will comply with this obligation by 1 January 2012.

Extended warranties

The ACL introduces a new offence provision which prohibits extended warranty programs from being promoted on the basis of benefits already provided by statutory guarantees. This means great care will now be needed in designing and promoting extended warranty products. Companies with existing warranty products should immediately review how those products are sold.

Product Safety

Every business must now notify the ACCC within 2 days of becoming aware that any product it supplied has been associated with any serious injuries, illness or death. Failure to notify in time may result in penalties of up to $16,650 per offence.

Businesses should ensure that they have appropriate processes in place to be able to comply with this onerous obligation. The text of notifications will also need to be carefully considered to avoid making unnecessary admissions.

Unfair contract terms

Since July last year, any term in a standard form consumer contract that is found to be 'unfair' is void and unenforceable. In addition, since January, consumers in any state or territory can use these new laws to challenge any terms that they think are 'unfair' in their local consumer or small claims tribunal. Such challenges are easy and almost costless for the consumer, but could have large consequences for suppliers.

Expect to see growing numbers of consumer contracts challenged in this way – we expect in time it will become as important in consumer litigation as s52 of the TPA (or s18 ACL!) is now. If you haven't reviewed your standard form consumer agreements, you should do so now.

What should you do to comply?

You need to:

  1. understand these new laws; and
  2. review your agreements, documents and practices to ensure they comply.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.