Competition & Consumer Act 2010 & the Australian Consumer Law LCSA Annual Conference August 2013 Michael Jerabek Education & Engagement Manager (NSW & ACT)

Australian Competition & Consumer Commission National law enforcement agency responsible for administering the Competition and Consumer Act 2010, which aims to: promote competition and fair trading; and protect consumers Parallel role of NSW Fair Trading

What will I cover today? Consumer guarantees Misleading & deceptive conduct Unconscionable conduct Unfair contract terms law Unfair sales practices Product safety Scams

Consumer guarantees Consumer guarantees apply to: goods or services of any type up to $40,000 in value (and...) purchased but also leased and hired online, over the phone or in person both new & second hand Consumer guarantees do NOT apply to: one-off sales (e.g. private sales such as car or garage sale) buying to on-sell (e.g. car repairer purchasing parts to be used in repairs) If consumers simply change their minds If consumers misuse the goods If purpose not specified and not obvious from the circumstances

Nine consumer guarantees applying to goods: Acceptable quality (acceptable appearance & finish, free from defects, safe & durable) Reasonably fit for purpose Description is accurate Goods match sample Reasonable availability of spare parts & repair facilities for reasonable length of time Voluntary (express) warranties to be satisfied Suppliers guarantee clear title Suppliers guarantees undisturbed possession Goods to be free of hidden securities or charges If any of these guarantees are not met, the consumer has a right to a remedy.

Three consumer guarantees applying to services A supplier must meet the consumer guarantees of providing services: with due care and skill which are fit for any specified purpose within a reasonable time (when no time is set) If any of these guarantees are not met, the consumer has a right to a remedy.

Consumer guarantees – important concepts Major failure Minor failure Consequential loss Rejection period Trader’s v manufacturer’s responsibility Consumer guarantees v voluntary warranties

Misleading & Deceptive Conduct It is unlawful for a business to make statements in trade or commerce that are: misleading or deceptive, or likely to mislead or deceive Including: Failing to disclose relevant information Promises, opinions & predictions Advertisements, promotions, quotations & testimonials Representations about quality, price, age, origin, performance etc. Note: ‘Small print’ and disclaimers not necessarily an excuse Overall impression considered (can be misleading even if true) Take into account special vulnerabilities of specific groups

Unconscionable conduct Under the ACL unconscionable conduct covers business to business transactions as well as business to consumer transactions UC can be described as behaviour which is irreconcilable with what is right or reasonable and is seen as harsh and/or oppressive Usually involves a stronger party exploiting its bargaining advantage to impose terms or conditions that are unreasonable or against good conscience towards a smaller or weaker party

Some examples of possible unconscionable conduct Failing to disclose important contractual terms Not allowing sufficient time for consumer to read agreement, seek advice, ask questions & decide Refusing to deal with legitimate complaints Not explaining terms of contract to consumers from NESB Using friends/relatives to influence decision-making Refusing to accept ‘No’ for an answer

Unfair contract terms ACL enables a court to find a contract term unfair & declare it to be VOID (treated as if it never existed) Applies to standard form contracts including written and oral – over the phone or face to face Contract remains binding to the extent that it can operate without the unfair term

Unfair contract term test 1.Does the term create a significant imbalance between rights and obligations of the two parties? 2.Is the term reasonably necessary to protect legitimate interests of the business? 3.Would the term cause a detriment (financial or non-financial) if the business tried to enforce it? Also, how transparent is the term?

Sales Practices Unsolicited supplies Unsolicited consumer agreements/Door-to-Door sales Pyramid schemes Multiple & component pricing Lay-by agreements Referral selling Harassment and coercion Proof of transaction

Product Safety Imposing mandatory safety standards Product testing Issuing public safety warning notices Issuing compulsory recall notices Banning unsafe products Mandatory reporting

Scamwatch website how scams work, latest scams, report scams, register for alerts, scambuster app, educational videos etc. The issue of grant re-sellers…

Further information Call the ACCC Infocentre – Visit Visit Visit Visit ACCC Shopper App

Any questions?