HR Update: ACCC internet sweep targets online traders

In brief

The Australian Competition and Consumer Commission (ACCC) has joined the International Consumer Protection Enforcement Network (ICPEN) and has recently undertaken an information gathering sweep of the internet, targeted at online traders who may use confusing or misleading website terms to avoid their obligations to consumers.

How it affects you

The ACCC sweep focussed on consumers’ rights to have faulty products or substandard services repaired, replaced or refunded. The ACCC targeted how online traders represent consumers’ rights in their terms of use and service and/or supply terms, in particular relating to repair, replacement or refund rights under the Australian Consumer Law. ACCC has indicated its intention to crack down on website terms which may confuse or mislead consumers into believing that any relevant rights do not apply.

In practice

In January 2011 the Federal Government overhauled Australia’s consumer laws, which are now contained in the Australian Consumer Law. If you trade in an online business that operates in Australia then you need to be aware of the requirements of the Australian Consumer Law. There are significant penalties for traders who contravene these requirements.

Consumer rights

Under the Australian Consumer Law consumers have the right to ask for a repair, replacement or refund of substandard services sold or goods sold that are faulty, do not do what they are supposed to do or do not match the description provided.

These statutory consumer guarantees cannot be excluded and will apply despite what is contained in website terms and conditions.

If your website terms and conditions may be taken to confuse or mislead consumers about their rights under the Australian Consumer Law then you may be in breach of the law.

What to do

With the ACCC’s crack down on online trading terms, it is more important than ever to review your website terms and conditions to ensure they are up to date and comply with the Australian Consumer Law.

Your online business may be at risk if you do not ensure that your website terms and conditions comply with the Australian Consumer Law. If you are found to be in breach of the Australian Consumer Law you may suffer harsh penalties, including fines of up to $220,000 for individuals and $1.1 million for companies.

Next steps

If you already have website terms and conditions we can undertake a review using our review checklist and methodology. If you do not have any terms and conditions, we can assist in preparing appropriate terms and conditions, which are tailored to your business’ needs, address liability and risk issues (among others) and ensure compliance with the Australian Consumer Law.