In preparation for the second tranche of the Australian Consumer
Law (ACL) reforms (to be introduced into Parliament next year) the
Treasury has released a consultation paper with draft Regulation
Impact Statements (RIS) for public comment by Friday 27
The draft RIS set out options for various wide-ranging reforms
to the Trade Practices Act affecting everyday trade and commerce,
and also for implementing some of the recommendations on product
liability law made by the Productivity Commission's Review of
the Australian Consumer Product Safety System.
As the RIS attempt to gauge the regulatory burdens and consumer
benefits of each proposal, this is a good opportunity for business
to identify any overly burdensome reforms and put its views to the
False or misleading in section 53 to be
Currently section 53 of the Trade Practices Act applies to
certain representations. Depending upon the type of representation,
these are prohibited if they are "false" or "false
or misleading". The proposed changes would tidy up the section
by prohibiting a representation if it is "false or
This does have the effect of widening the scope of section 53.
As the consultation paper notes, most false or misleading
representations are also false or misleading conduct, and hence are
already covered by section 52. The key difference, however, is that
a breach of section 52 does not result in a criminal prosecution -
a breach of section 53 can lead to criminal penalties.
The paper is also proposing a specific prohibition on false or
misleading representations concerning testimonials.
Information and standards of disclosure to
The type and style of information provided to consumers are also
Currently, the Federal Minister can declare, by regulation, a
standard to be a consumer product information standard, meaning
that goods that fall within that standard cannot be supplied
without certain information being supplied. There are also State
and Territory information standards applying to certain classes of
goods. The result is that if something is not covered by a
Commonwealth standard, it could be covered by a State and Territory
information standard - but only in that jurisdiction.
The paper sets out two options:
incorporate the Trade Practices Act information standards power
without amendment into the ACL, which applies to goods only;
include a general power in the ACL to prescribe information
standards in relation to both goods and services.
The form in which information is disclosed to a customer is also
affected, with three options being proposed:
not adopting standard of disclosure requirements in the ACL, so
the national law would remain the same, although Victorians would
lose their current protections;
adopting, in principle, the Victorian requirements that
documents specifically required to be provided under the ACL must
be clear and legible; or
adopting, in principle, the Victorian requirements that all
consumer documents must be clear and legible.
Other reforms proposed
Comments have also been sought on the following:
Telemarketing and door-to-door: unsolicited
offers and sales that occur in a non-retail environment, in person
or via telephone, are currently regulated by different State and
Territory laws, as well as certain Federal laws. Stakeholders were
keen on harmonising the different compliance regimes. Three options
are canvassed: a total ban, and two levels of regulation with
different levels of compliance and consumer protection.
Bills and receipts: should business be required
to provide receipts or itemised bills in certain circumstances, in
addition to existing legal requirements to do so?
Lay-by sales: should there be national
regulation of lay-by sales?
Dual pricing: should suppliers be prohibited
from selling at more than the lowest appended price where multiple
prices are indicated for a good?
Unauthorised advertisements or services: should
the ACL ban asserting a right to payment for unauthorised
advertisements? Should the recipient of unsolicited services should
be liable to pay for them?
Offering gifts and prizes without an intention to
provide them, or to provide them as offered: should the
prohibition also impose a requirement that gifts and prizes offered
are provided within a "reasonable time" and as ordered,
thereby removing the need to show the offeror had an intention not
Accepting payment for goods or services without an
intention to provide them, or to provide them as offered:
should this be altered in a similar way - that is, a requirement
should be imposed to provide goods or services within a
"reasonable time" after payment is accepted?
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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