The Federal Parliament has recently passed legislation to increase maximum financial penalties enforceable under the Australian Consumer Law (ACL) following recommendations by Consumer Affairs Australia in the Final Report of the ACL Review.

These changes will apply to the majority of provisions under the ACL where a fine or pecuniary penalty for a breach is applicable. These include misleading conduct, unconscionable conduct, unfair practices, breaches of safety standards, supplying goods covered by a ban and failure to comply with recall notices.

The legislative amendments mean penalties for each breach of the ACL will be increased from:

  • For companies: from $1.1 million to the greater of, $10 million, three times the value of the benefit received, or if the benefit cannot be calculated, 10 per cent of the annual turnover of the company in the preceding 12 months; and
  • For individuals: from $220,000 to $500,000.

The Australian government, as well as the Australian Competition and Consumer Commission (ACCC), are sending a clear message to Australian companies that breaches of the ACL should be taken as seriously as breaches relating to cartels and other anti-competitive conduct.

Companies should no longer dismiss breaches of the ACL as being the cost of doing business, especially after ACCC Chair Rod Sims said “companies will now face more serious financial consequences for breaching consumer law that align with competition law breaches”.