On 19 April 2017 the final report of the Australian Consumer Law Review, conducted by Consumer Affairs Australia and New Zealand, was publically released. The review was initiated in mid-2015, and involved a broad ranging review of the Australian Consumer Law (ACL) to assess the effectiveness of the provisions and protections and make any recommendations.
The report contains a number of proposals and recommendations which, if accepted by Commonwealth, State and Territory consumer affairs ministers and legislated, have the potential to effect a range of organisations including retailers, life insurers and consumer products/service providers.
Some of the key legislative proposals in the report include:
- A new general safety provision requiring products to be tested by traders for safety. This would be supported by a penalty regime for breaches of the new safety provision, plus expanded ACCC powers to obtain information about product safety
- Clarification of consumer's rights to refunds/replacements and what constitutes a 'major failure', including clarifying where repeat defects or failures together constitute a 'major failure'
- Obligations to make additional disclosures to consumers when offering extended warranties for goods and/or services or warranties against defects
- The addition of a definition of 'voluntary recalls', and an increase in penalties for failure/refusal to notify a voluntary recall
- The extension of unconscionable conduct protection to apply to publically listed companies
- An expansion of the unfair contracts regime to include contracts regulated by the Insurance Contracts Act 1984
- Increasing the threshold in the definition of 'consumer' from $40,000 to $100,000, noting that this would not apply retrospectively
- A tightening of unsolicited selling provisions, specifically around public places, false bills, and where a supplier has obtained a consumer's details from a third party
- Increasing transparency in pre-selected pricing options in online shopping and ensuring that consumer guarantees apply to all online auctions
- An increase in maximum financial penalties for breaches of the ACL, effectively aligning the penalties in the ACL with those in other parts of the Competition and Consumer Act. The proposed maximum penalties for companies would be the greater of (a) $10 million or (b) three times the value of the benefit received by the company from the act/omission or (c) if the benefit cannot be determined, 10% of the annual turnover of the company in the previous 12 months.
It will be interesting to see how the Commonwealth, State and Territory governments respond to the report and we will continue to monitor those responses and keep you abreast of follow up actions.