News & Insights

Consumer Affairs Australia and New Zealand (CAANZ) has proposed in a recent report, 19 legislative reforms to improve protection for consumers under the Australian Consumer Law (ACL).

The report issued by CAANZ is the result of over 260 submissions, 130 face to face consultations and research involving more than 5,000 consumers and 1,200 businesses.  The report identifies various opportunities to align the ACL with consumer expectations and ensure that it continues to be relevant and responsive to new and emerging consumer law issues into the future.

What are the recommendations?

The recommendations put forward include:

• Making it easier for consumers to get a refund where goods do not meet consumer guarantees in a short period of time or where goods are affected by multiple non-major failures;
• Providing clarity on warranties and introducing a cooling-off period;
• Clarifying the scope of the exemption from consumer guarantees for transport or storage of goods where damaged or lost in transit;
• Introducing a general safety law to ensure a product is safe before it enters the marketplace including penalties for any breaches;
• Introducing a statutory definition for ‘voluntary recall’ and increasing penalties associated with a failure or refusal to notify a voluntary recall;
• Extending ‘unconscionable conduct’ protections to publicly-listed companies;
• Extending unfair contract terms to insurance contracts and enabling regulators to use their powers to assess if terms may be unfair;
• Clarifying that the scope of unsolicited selling provisions includes public places;
• Enhancing transparency of online sales so that additional fees and charges associated with pre-selected options are clearly detailed in the headline price; and
• Applying consumer guarantees to online auctions.

In addition to these proposed changes, there are two other changes, if accepted, which will have a significant impact on businesses and consumers. These proposals are:

• Increasing the threshold for the definition of a “consumer” from the current $40,000 to $100,000. This would give consumer protections to a far greater range of purchasers than ever before; and
• Increasing the maximum financial penalties available under the ACL to align with the current penalties for “competition” breaches so as to create a more significant deterrent (eg. an increase of company penalties from $1.1 million to $10 million).

When will this happen?

The proposed changes are being tabled by the Commonwealth, State and Territory consumer affairs Ministers later this year. As such, we anticipate any changes to the ACL itself will be at least 12 months away.

Macpherson Kelley will be keeping a close eye on these recommendations throughout 2017 and will provide updates as they become available.

If you have any consumer law issues you require assistance with such as terms of trade, product recalls, consumer guarantees and warranties, please do not hesitate to contact Paul Kirton or Kelly Dickson.