Is your company aware of its obligations under the Australian Consumer Law (ACL)? Do your sales staff know what the obligations entail?
Complaints about misleading conduct, false representations and consumer guarantees are on the rise, and the Australian Competition and Consumer Commission (ACCC) is taking note.
Breaches of the ACL can attract significant penalties, and the ACCC has continued to aggressively pursue companies that breach their ACL obligations, particularly for these types of breaches.
The ACCC has released the eighth report in its Small Business in Focus series, which highlights current trends in complaints, recent enforcement proceedings, and the priorities of the compliance and enforcement policy in 2014.
You may have heard of some of the recent enforcement proceedings, which include:
- Compare the Market paid an infringement of $10,200 for falsely claiming that it compared more health funds than any other site, when in fact, two comparison sites (including one operated by the Federal Government) compared more funds than Compare the Market 1
- Carlton United Breweries being ordered to pay $20,400 for two infringements when it represented that certain beers were brewed by a small brewer in Byron Bay when this was not the case
- a retailer being ordered to pay a penalty of $10,000 for representations made by its salesperson, that if a fault in a laptop was a software issue it would not be covered by the refund or replacement provisions of the ACL2
- after handing in a camera for repair, a consumer was told that the camera would only be returned if they paid an $88 fee to the manufacturer. The retailer that made the representation was found to be in breach of the ACL and ordered to pay a penalty of $25,0003
- online retailer Scoopon was ordered to pay a penalty of $1,000,000 for a series of misleading representations made to both businesses advertising through its website and consumers that purchased items from its website.4
The ACCC has signalled that it will continue to aggressively pursue those in breach of their ACL obligations with a particular focus on the following areas:
- online trading issues
- complexity and unfairness in consumer and small business contracts
- credence claims (such as ‘organic’ or country of origin claims)
- consumer guarantees, especially in relation to the sale of extended warranties.
If your business has a consumer focus, you need to be aware of your obligations under the ACL, and ensure your sales staff are also aware of the obligations. Your company policies, particularly in the area of consumer guarantees and returns, must also reflect your obligations under the ACL.
The ACCC has published guides and online programs to assist businesses in tackling these issues, which are available from the ACCC website.
If you would like to know more or would like us to assist your business with these issues, please contact our Dispute Resolution and Litigation team.
|Gina Wilson | Partner|
|Katherine Styles | Senior Associate|