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More reforms to “clarify and strengthen” the ACL

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This article was written by Caroline Coops and Paula Mucha.

Overview

On 18 October 2018, the Australian Parliament passed the Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 (Cth) (Act). The Act is intended to "clarify and strengthen" the consumer protections relating to consumer guarantees, unsolicited consumer agreements, product safety, false billing, unconscionable conduct, pricing and unfair contract terms.[1]

The Act received Royal Assent on 25 October 2018. Therefore, it commences on 26 October 2018.

What does this mean for you?

The majority of amendments take effect on commencement of the Act (with the exception of the headline pricing requirement, which takes effect 12 months after the commencement of the Act). It is therefore critical that entities promptly take any necessary steps to ensure that their business and processes are up to speed.

The amendments

The Act amends the Australian Consumer Law (ACL)[2] and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). Like the recent reforms to the maximum ACL penalties (see our previous alert here), this Bill was the result of proposals made in the ACL Review Final Report, which was published in April 2017.

The new laws are intended to "improve the efficiency and effectiveness of Australia's consumer protection regime".[3] The amendments are summarised below.

Heightened powers

The Act broadens regulatory powers by:

  • (Extending investigative powers to assessing potentially unfair contract terms) the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investment Commission (ASIC) will be able to use their compulsory notice powers to investigate the terms of a consumer contract or small business contract, for the purposes of determining whether to seek a declaration that a term is unfair. Most notably, the ACCC will be able to issue a notice under s 155 of the CCA to investigate unfair contract terms.
  • (Strengthening product safety information gathering powers) the ACCC will be able to obtain information about product safety from any person who is likely to have relevant information. Previously, the ACCC could only obtain information from the supplier.

Improved protections

The amendments strengthen the protections available under the ACL by:

  • (Extending unconscionable conduct protections to all companies) the unconscionable conduct protections in the ACL and the ASIC Act can now be relied upon by listed public companies.
  • (Ensuring all options are included in the single price, unless de-selected) under the current law, an optional charge does not always need to be included in the single (or "headline") price.  The Bill amends the ACL to require that that any additional fees or charges payable at the option of the customer are included in the single price, unless they are deselected by the customer. This change is intended to increase price transparency, particularly in online shopping.
  • (Extending the application of the unsolicited service provisions) the Bill amends the ACL definition of "unsolicited services", to allow the provisions to apply to issuing bills for services not provided.

Clarifications

The Act also clarifies that:

  • unsolicited consumer agreements may be entered into in a public place, even though a consumer's invitation is not required for a dealer to enter a public place;
  • the exemption from the consumer guarantees for the transport and storage of goods, where the goods are damaged or lost in transit, only applies to the extent that the goods are being transported for a purpose related to the consumer's business; and
  • the ACL provisions in the ASIC Act that apply to financial services also apply to financial products.

Other

The remaining changes:

  • ease evidentiary requirements for private litigants by enabling litigants to rely on admitted facts and findings of facts from earlier proceedings;
  • allow third parties to give effect to a community services order under the ACL, where the trader in breach is not qualified or trusted to do so; and
  • amend the ASIC Act to address inconsistent terminology.


[1] Explanatory Memorandum, Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 (Cth) 5.

[2] Competition and Consumer Act 2010 (Cth) Schedule 2.

[3] Commonwealth, Parliamentary Debates, Senate, 18 October 2018, 39-40 (Anne Ruston).



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