Monetary penalties for civil offences under the proposed Australian Consumer Law would enhance the Australian Competition and Consumer Commission's ability to protect consumers through better and more timely outcomes.
Addressing the National Consumer Congress, ACCC Deputy Chair, Mr Peter Kell, said the proposed powers include civil pecuniary penalties, banning orders, unfair contract terms, substantiation notices, representative actions and redress for non-parties.
"The introduction of civil pecuniary penalties for breaches of consumer protection provisions is an important and overdue reform. Most importantly, it will allow the ACCC to seek proportionate responses to breaches and will enable the ACCC to more effectively promote compliance with the law."
Civil pecuniary penalties would bridge the existing gap between the civil measures currently available for breaches of consumer protection provisions, and the criminal penalty provisions.
Banning orders, which would restrict individuals from managing corporations or engaging in particular business activities, were particularly useful when addressing problems that arise with 'repeat offenders' in breaches of consumer law.
The power to issue substantiation notices requiring traders and suppliers to provide evidence that supports the claims they make (such as 'green claims'), will enable the ACCC to undertake initial investigations in a greater number of matters, and also to deal with these matters more quickly and efficiently.
Mr Kell said the new law would provide the ACCC the ability to seek orders from the court to provide redress for consumers who are not parties to particular legal action.
"This is particularly relevant as the current limitations disproportionately impact on vulnerable and disadvantaged consumers, who are not likely to be aware of court processes."
Mr Kell welcomed the announcement by the Federal Government of a review of the warranty and refund provisions of the Act. The ACCC was targeting the area of warranties to improve consumer outcomes.
"We are today releasing a substantially revised Warranties and refunds: a guide for consumers and business," he said.
The ACCC was actively looking to target enforcement action on warranty rights, including writing to key industries identified by consumer complaint statistics as generating disproportionate problems and putting them on notice of their obligations.
"The ACCC holds increasing concerns that too many businesses are not well versed in their obligations to consumers and are too quick to equate consumer rights with those provided in express or voluntary warranties rather than the statutory protections afforded by the TPA. This appears to be a particular problem with high-end electrical products, an area in which consumer complaints are growing.
"The ACCC is also concerned that too many consumers are not aware of their rights – impacting on their ability to assert their position with a trader and making less than informed decisions on choices over the acquisition of products like extended warranties."
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