With the change from Trade Practices Act to the Competition and Consumer Act comes a new national regime for consumer protection. To assist the ACCC in monitoring and enforcing these new laws, the ACCC now has the ability to issue infringement notices for suspected breaches of the Act and it appears to be making good use of these powers. Notices have been issued to businesses in a variety of industries on a variety of issues including in respect of pricing, refunds, affiliations and associations.
The ACCC can issue an infringement notice if the ACCC has reasonable grounds to believe that a person or corporation has:
- engaged in unconscionable conduct
- engaged in unfair practices (though not for misleading or deceptive conduct)
- engaged in pyramid selling
- failed to comply with certain product safety and product information requirements, or
- failed to respond to (or properly respond to) a substantiation notice.
If the ACCC forms this belief then it can issue a notice that you pay up to $1,320 (individuals) and $6,600 (corporations). You then have 28 days in which to pay the infringement.
If you pay the infringement, then the ACCC will not take the matter further. However, if you fail to pay the notice then the ACCC may commence proceedings.
A recent example of where this has taken place is where the ACCC issued 8 infringement notices to 8 different restaurants for failing to advertise a single price for their products. The restaurants had used disclaimers at the bottom of their menus stating that a surcharge applied on Sundays or public holidays, a practice which in unlawful. Four of these restaurants paid the notices and no further action was taken. Their financial exposure was limited to the amount of the infringement notice, which could not have been more than $6,600.
The other four restaurants did not pay the infringement notice and the ACCC commenced proceedings against the restaurants. Each of those 4 restaurants was found guilty and the court ordered that they each pay a penalty of $13,200 (double the maximum amount permissible under an infringement notice). Further, and perhaps more significantly, each was ordered to pay the ACCC’s costs. Costs of legal proceedings can be very significant and will often far exceed the cost of an infringement notice.
That said, paying the infringement notice may not always be the right decision for your business. It is important to bear in mind the public nature of the process and the potential damage to your business’s reputation, particularly given the ACCC only needs to suspect a breach to issue a notice. Either way you should not sit on a notice if received and should act quickly to get advice and assistance in responding.