The Trade Practices Act, a key feature of the Australian business landscape since 1974, on 1 January became the Competition and Consumer Act 2010 and now incorporates the new Australian Consumer Law – a national set of consumer protections.
The Australian Competition and Consumer Commission will monitor compliance with the new consumer protection provisions and encourages consumers and businesses to be aware of their new rights and obligations.
The Australian Consumer Law brings together a number of national, state and territory consumer protection laws to ensure consistency in the rights of consumers regardless of where they live. Equally all Australian businesses are on a level playing field in their dealings with consumers. It will be enforced by the ACCC and all state and territory consumer protection agencies.
Acting ACCC chairman Michael Schaper said that with the start of the Australian Consumer Law, national consumer protections apply to unsafe products, unfair selling practices and guarantees on goods and services.
"This is on top of the unfair contract provisions and enhanced enforcement powers which came into effect last year," Dr Schaper said.
"The national product safety system is now in place, harmonising product safety bans, standards and coordinating monitoring and enforcement efforts across all states and territories.
"This provides a more effective means of ensuring unsafe products are not sold to consumers. In addition, a new product safety mandatory reporting requirement has been introduced to enable the earlier identification of emerging hazards and so the ACCC may take appropriate action to preserve consumer safety. Businesses must now notify the ACCC within two days after they become aware that product they supplied caused, or may have caused, serious injury, illness or death."
Consumers can report product safety incidents by notifying the place of purchase, or by using the product safety website www.productsafety.gov.au or by calling the ACCC on 1300 302 502.
Another key aspect of the Australian Consumer Law is consistent protections against unfair selling practices. This is to improve protection for consumers from high pressure or misleading sales tactics in door-to-door sales, telemarketing and other forms of selling.
"These protections limit the hours sales people can contact consumers and require a written agreement to be provided which discloses basic information, including cooling off periods, termination rights and the total price of the sale. This allows consumers pressure-free time to change their minds," Dr Schaper said.
The ACL prohibits a business from providing consumers with an unsolicited product or service and demanding payment for it. Contravening unsolicited sales laws can result in penalties of up to $10,000 for individuals or $50,000 for companies.
The ACL also includes a set of statutory guarantees which all consumers are entitled to when they buy products and services from 1 January 2011.
"The consumer guarantees provide greater clarity for businesses and consumers about the circumstances where businesses are required to provide a remedy for a problem with a product or service," Dr Schaper said.
There are a number of guarantees, for example, goods must be of acceptable quality, fit for any disclosed purpose and match any description given to them, services must be carried out with due care and skill, be fit for any disclosed purpose and achieve any specified result.
"Businesses can extend, but not reduce these guarantees with their own company policies.
"If a good or service does not meet the consumer guarantees, then a consumer has rights to a remedy—for example a refund, replacement or repair, or having unsatisfactory service performed again—depending on the circumstances."
In most cases consumers are entitled to seek a remedy from the seller or service provider and businesses must honour these obligations.
The consumer guarantees also clarify who is entitled to choose the most appropriate remedy—the supplier or the consumer—depending on the severity of the problem.
"A major failure is generally one that is so severe that a reasonable consumer would not have bought the good or service if they had fully understood the problem with it," Dr Schaper said.
"If the problem is major, or cannot be fixed within a reasonable time, the consumer can choose what he or she prefers—a refund, a replacement good or compensation for any drop in value.
"Generally, if the failure to comply with the guarantee is not major and can be remedied within a reasonable time, the supplier can choose whether to repair or replace the good, resupply the services or provide a refund.
"These consumer rights don't cover problems caused through misuse or carelessness or circumstances where consumers later change their mind. Of course, stores that offer refunds or exchanges under their own voluntary or extended warranty must honour these.
"It is important for all businesses to ensure that their policies, procedures and advertising comply with the ACL.
"A number of Australian businesses have already taken positive steps in preparing for the start of the new laws. The ACCC will continue to educate and inform consumers and business about their rights and obligations under the ACL throughout 2011."
The ACCC will closely monitor businesses implementation of these new laws and will take strong enforcement action where necessary to protect consumers and to ensure that the level playing field the ACL established for businesses nationally is maintained.
A media ready reckoner on the Australian Consumer Law changes is available on the ACCC media centre www.accc.gov.au/media