On 13 February 2012 the ACCC provided an update on its use of
new powers to issue infringement notices to business. These powers
allow the ACCC to issue infringement notices where:
it has reasonable grounds to believe that there has been a
contravention of certain consumer protection provisions under the
Australian Consumer Law, such as provisions relating to:
false or misleading representations regarding goods, services
unsolicited marketing (e.g. door to door, telephone sales or
sales other than from a place of business);
instalment payment ('lay-by') agreements;
product safety and standards;
failure to provide invoices or warranty documentation; or
a business fails to substantiate marketing claims in response
to a 'substantiation notice' issued by the ACCC or responds
with false or misleading information.
Since the introduction of the infringement notice powers on 15
April 2010, the ACCC has issued almost 70 infringement notices for
marketing related breaches, with a total value of over
The ACCC has reported that many of these infringement notices
were issued for misleading and deceptive conduct, including false
and misleading claims in advertising and marketing.
The ACCC can issue an infringement notice up to 12 months after
an alleged contravention.
Individual penalties can vary depending on the allegation; they
are generally fixed at $6,600 for a corporation, ($66,000 for a
listed corporation) and $1,320 for an individual.
A business issued with a penalty notice is not obliged to pay,
however by doing so it may avoid legal proceedings being initiated
by the ACCC. Passing up an opportunity to resolve the matter by
paying an infringement notice is also likely to lead to a higher
penalty being imposed, should the ACCC commence legal proceedings.
Payment does not amount to an admission of liability or that the
Competition and Consumer Act was contravened. Payment may be made
within 28 days, however the ACCC may extend this period for a
further 28 days.
Businesses need to ensure that claims made to consumers,
particularly in the course of advertising and marketing, can be
substantiated even where marketing material is prepared by external
As well as the risk that businesses may receive an infringement
notice or have other action taken by the ACCC or by competitors,
businesses should be mindful of the reputational risk associated
with receipt of an infringement notice. The ACCC publishes
information on the Infringement Notice Register about businesses
that have been issued with and paid infringement notices. This may
also have flow on effects such as encouraging claims for
compensation from consumers who have suffered harm.
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Winner - Australasian Law Awards Gold Employer of Choice 2011
Finalist - ALB Australasian Law Awards 2008, 2010 and 2011 (Best
Winner - BRW Client Choice Awards 2009 and 2010 - Best Australian
Law Firm (revenue less than $50m)
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.
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