You may recall that back in July 2020 we wrote an article on upcoming changes to the meaning of a "consumer" under the Australian Consumer Law (ACL) and how to prepare your business for this change before the deadline. Well, we are here to remind you that that deadline, being 1 July 2021, has arrived.

The purpose of this article is to provide a recap of this change to the ACL, namely the increase to the consumer price ceiling from $40,000 to $100,000, what this means for businesses and how to ensure your business is compliant (if it isn't already).

Meaning of consumer under the ACL and the consumer guarantees

Under the ACL, a person is generally taken to have acquired goods or services as a "consumer" if:

  • the amount payable for those goods or services is $40,000 or less; or
  • the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption.

Where a customer, be it an individual or business, is deemed to be a consumer, they will have the benefit of certain non-excludable rights and guarantees, including that:

  • goods  are of acceptable quality, fit for purpose and match the description given of them
  • services are provided with acceptable care and skill, fit for purpose and delivered within a reasonable time.

Failure by a provider of goods or services to comply with these guarantees entitles the consumer to various remedies, which may include repair, replacement, refund, cancellation and compensation.

Consumer price ceiling increase from $40,000 to $100,000

From 1 July 2021, the consumer price ceiling of $40,000 will be increased to $100,000. This means that goods and services costing $100,000 or less will now come within the scope of the ACL and its consumer guarantees. The purpose of this increase is to ensure that the ACL remains fit for purpose by addressing the rising prices of consumer goods and services, as well as the inequalities in bargaining power between those that produce and or supply them vis-à-vis the small businesses and individuals who acquire them.

It should be noted that this increase (including the start date), has also been mirrored in legislation applying to the provision of financial products and services.

Implications for businesses

The implication of this increase to the consumer price ceiling is that the ACL and the consumer guarantees contained within it will apply to significantly more consumer transactions than previously. This may mean that you need to consider the application of the ACL consumer guarantees to a significantly expanded class of customer transactions than before. For some businesses, this may mean that the provision of goods and services by you is now subject to the application of the ACL consumer guarantees where this wasn't the case before.

What should you do now?

If your business provides goods or services which generally cost $100,000 or less, then now (if you haven't already) is the time to check your business' compliance with the ACL and the consumer guarantees, including, but not limited to:

  • understanding which consumer guarantees will be implied into the contracts for your goods and or services and ensuring that you are comfortable that your goods or services comply with these guarantees. This may include checking the description of goods and services to ensure they match what is provided
  • determine whether you need to update your terms and conditions. The ACL will void any contractual terms which run contrary to the consumer guarantees and requires mandatory wording be included where additional defect warranties are offered
  • determine whether you also need to update your contract terms with manufacturers to account for ACL compliance, such as the inclusion of indemnity clauses for breach of consumer guarantees
  • ensure your employees (particularly frontline employees, such as customer service and sales staff) understand the ACL protections and what rights and remedies consumers are entitled to as a result. This may mean organising compliance training for relevant staff. This is particularly important as many businesses have been prosecuted for breach when frontline employees make misleading or deceptive statements about the application of the consumer guarantees
  • prepare financially for the likely increase in refunds, replacement and or compensation payments that will be available to customers for a wider range of goods and services.

It is important that these measures are implemented as soon as possible. This is particularly because the relevant legislation has already given businesses 12 months to prepare for this change, so the ACCC are more likely to enforce with full force from 1 July 2021 onwards.

Additional considerations for businesses that operate in NSW

Businesses operating in NSW, including those that are based outside of NSW but supply to customers in NSW, also need to be aware of the additional disclosure obligations operating in the State. These disclosure requirements came into effect in July 2020 and include the requirement that businesses take all reasonable steps to ensure consumers are aware of the substance and effect of terms and conditions which may substantially prejudice their interests, before they enter into these transactions. We've previously discussed these changes. Broken down, these laws require businesses to:

  • determine which clauses in their consumer contracts have the potential to substantially prejudice the interests of consumers. This may include limitation of liability clauses (to the extent that they are permissible under the ACL), the sharing of identifiable customer data to third parties or terms that require a consumer to pay an exit fee, a balloon payment or similar
  • take "reasonable steps" to ensure that consumers are aware of these terms and their effect. What amounts to reasonable steps will vary depending on the circumstances, however, the best way to comply is to ensure clear, upfront and automatic disclosure by identifying and drawing consumers' attention to the prejudicial terms and providing an explanation. By way of example, for an online purchase, this may include a pop-up box that explains the prejudicial term(s) in plain English and requires the purchaser to acknowledge reading this explanation contained within the pop-up by way of a tick box, before proceeding with the transaction.  

The legislation also requires intermediaries, such as agents and brokers, who receive financial incentives to take all reasonable steps to ensure the consumer is aware the arrangement that provides for the financial incentive exists. What amounts to taking "reasonable steps" in these circumstances is the same as those for goods and services providers.

Failure to comply with the disclosure obligations in NSW can result in hefty fines of up to $22,000 for individuals and $110,000 for corporations.  

Holding Redlich is here to help your business

If you think your business will be affected by these changes and you either haven't prepared your business for this change or aren't sure if the measures you have implemented sufficiently ensure the compliance of your business, we would be happy to assist.


  • the increase in the consumer price ceiling under the ACL from $40,000 to $100,000 takes effect on 1 July 2021
  • the increase means more "consumers", which in turn means more transactions will be captured by the ACL and the consumer guarantees contained within it
  • there are a number of considerations and measures that businesses must put in place to ensure they are compliant
  • the time for compliance is now, with the ACCC likely to use the full range of enforcement measures from the get-go
  • businesses who operate in NSW have additional disclosure obligations to consumers concerning any provisions which may substantially prejudice their interests
  • Holding Redlich has extensive experience in helping and advising businesses on ACL compliance and we are here to help you with these changes.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.