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Australian Consumer Law set to start on 1 January

By David Jacobson

All States have now passed legislation enabling the Australian Consumer Law (ACL) to operate in all jurisdictions in Australia from 1 January 2011.

The ACL replaces 20 statutes with one new national law. It includes the unfair contract terms legislation introduced on 1 July 2010.

The ACL will be administered and enforced jointly by the ACCC and the State and Territory consumer protection agencies, with the involvement of ASIC on financial services matters.

The ACL is contained in Schedule 1 of Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010.

The Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) has been amended to include the ACL provisions relevant to consumers of financial products and services.

The date for inclusion of standard wording in contracts for repair has been extended to 1 July 2011.

The date from which suppliers of goods and services must include standard wording in warranties against defects has been delayed to 1 January 2012.

From that date contracts must contain the following text: “Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.”

Key areas

The key areas are:

• consumer guarantees: the new term for warranties; explains supplier, manufacturer and importer responsibilities when there is a problem with goods and services; refunds, replacements, repairs and other remedies
• sales practices: explains unsolicited supplies, unsolicited consumer agreements (door-to-door and telemarketing), lay-by agreements, pricing, proof of transaction and itemised bills, referral selling, pyramid schemes, harassment and coercion
• product safety: covers safety standards, recalls, bans, safety warning notices and mandatory reporting requirements
• unfair business practices: covers misleading or deceptive conduct, unconscionable conduct, country of origin, false
  and misleading representations, information standards
• unfair contract terms: outlines what an unfair term is and which contracts are affected by the law. These provisions commenced on 1 July 2010.

Consumer guarantees
Manufacturers and suppliers should note that the consumer guarantees replace the implied warranties and conditions that previously existed in state and territory fair trading laws and the Commonwealth Trade Practices Act 1974. Eligible goods and services bought before 1 January 2011 will remain covered by the implied warranties and conditions in force at the time of purchase.

Staff should be trained to understand the rights of consumers.

A requirement to pay for a contractual right to which a consumer is already entitled by law will be a false and misleading representation.

The 12 new consumer guarantees which come into effect from January 1 are:

• Guarantee as to title
• Guarantee as to undisturbed possession
• Guarantee as to undisclosed securities
• Guarantee as to acceptable quality
• Guarantee as to fitness for any disclosed purpose
• Guarantee relating to the supply of goods by description
• Guarantees relating to the supply of goods by sample or demonstration model
• Guarantee as to repairs and availability of spare parts
• Guarantee as to express warranties

Guarantees relating to the supply of services

• Guarantee as to due care and skill
• Guarantees as to fitness for a particular purpose
• Guarantee as to reasonable time for supply

Full post as published by Australian Regulatory Compliance Review on December 15, 2010 (boomark / email).