Australian Consumer Law stage 2

The Ministerial Council on Consumer Affairs (MCCA) has agreed to the final form of the Australian Consumer Law which will take full effect on 1 January 2011. It will introduce a single, national law for fair trading and consumer protection, which applies equally in all Australian jurisdictions, to all sectors of the economy and to all Australian consumers and businesses. The Commonwealth Government intends to introduce a Bill in early 2010.

The Australian Consumer Law will be based on the existing consumer provisions of the Trade Practices Act 1974, but will include:

  • a new national unfair contract terms law, which is currently being considered by the Australian Parliament;
  • a new national product safety legislative and regulatory framework;
  • a new national consumer guarantees law, which will replace the provisions in 15 existing national, state and territory laws about implied warranties and conditions in consumer contracts for goods and services; and
  • reforms drawing on best practice in state and territory laws.

Product Safety

MCCA agreed that the new national product safety law will:

  • include a reporting requirement for suppliers to notify the appropriate product safety regulator when it becomes aware of consumer goods it has supplied that have been associated with a serious injury or death;
  • apply the national product safety requirements to services related to the supply, installation or maintenance of consumer products;
  • apply a threshold for product bans and product recalls to include goods which, through reasonably foreseeable use, will or may cause injury to any person; and
  • allow product safety regulators to undertake a product recall where no supplier can be found to conduct the recall.

Consumer rights

There will be a single national law guaranteeing consumer rights in relation to their acquisition of goods and services. They will be based on existing implied conditions and warranties, which will be simplified and streamlined.

Other changes include:

  • a single national law covering unsolicited sales practices, including door-to-door selling, telephone sales (to the extent not already covered by the Do Not Call Register Act 2006) and other forms of direct selling which do not take place in a retail context.
  • fundamental rules for lay-by sales transactions.
  • when a business promises to give a consumer a gift or a prize, they should be supplied to the consumer as described and within a reasonable time of the promise being made.
  • goods with multiple prices displayed should be sold at the lowest displayed price unless the seller chooses to withdraw them from sale.
  • false or misleading testimonials about goods and services are specifically prohibited.
  • demanding payment for unsolicited advertisements is prohibited and, in this regard, any document seeking payment for unsolicited goods, services, advertisements or directory entries shall include a statement that it is not a bill payable by the consumer. The Australian Consumer Law will also clarify that a consumer is not liable for unsolicited services.
  • Under the Australian Consumer Law, there will be a single national power for the making of information standards about goods or services.
  • The Australian Consumer Law will entitle consumers to receive a receipt for goods or services supplied above a certain value where businesses are not already required to give a tax invoice to a consumer under the GST law. The requirements will be consistent with those already in place in the GST law.
  • The Australian Consumer Law will also entitle consumers to request an itemised bill for services.
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