Additional protections for consumers

James Farrell and Julie Clarke
Federal
The introduction of the Australian Consumer Law (‘ACL’) represents one of the most significant developments in consumer protection in Australia. The ACL bolsters protection and increased certainty for consumers, while reducing compliance costs for business by consolidating twenty state, territory and federal laws into a single national law.

From 1 January 2012, new ACL protections extend to consumers relating to consumer guarantees, unconscionable conduct and unsolicited goods. Where ‘warranties against defects’ are offered by manufacturers or suppliers, consumers must now be provided with additional prescribed information about statutory consumer guarantees so they are not misled into thinking that their rights are limited by the terms of the warranties (regulation 90).

In relation to unconscionable conduct, the redundant distinction between statutory consumer and small business unconscionability has been removed, improving clarity and ensuring that the concept is applied consistently. New interpretative principles will ensure that a broad interpretation of unconscionable conduct is applied; in particular, to make clear that the statutory provision is not limited to equitable or common law doctrines of unconscionability or to pre-contractual unconscionability.

Where unsolicited goods or services are provided, the ACL provides consumers with a 10-day cooling off period and requires suppliers to provide ‘clear and accurate information’ about consumers’ cooling off rights. During 2011, suppliers involved in door-to-door trading had the option of complying with previous state and territory laws relating to the payment and supply of goods or services during cooling-off periods. If a business did not comply with the relevant state or territory provision, it was required to comply with the ACL provision, which prohibited the supply of any goods or services relating to the agreement or accepting or requiring any form of payment.

Standard provisions now apply across Australia, preventing businesses from accepting payment for any goods, or supplying services, during the cooling off period under an unsolicited consumer agreement worth more than $100. Goods may be supplied to a consumer during the cooling off period if the agreement is worth $500 or less.

By way of illustration, where a person knocks on a consumer’s door selling a vacuum cleaner worth $300, they may leave the goods with the consumer but not accept or require payment within the 10-day cooling off period. If the consumer elects to exercise their rights, the supplier will be required to collect the vacuum cleaner. However, where a telemarketer calls a consumer to sell tutoring software for $5000, the goods may not be provided within the cooling off period and payment cannot be sought/required.

The cooling off period may be extended to three or six months if the supplier has not met certain obligations, such as properly identifying themselves, providing goods or services in breach of the cooling off provisions, or failing to advise consumers of their rights.

Lawyers working with vulnerable or unsophisticated consumers will be familiar with predatory unsolicited selling practices by some businesses, and these provisions should improve consumer protections. Consumer rights advocate CHOICE agrees that the goal of the new consumer protections is laudable and long-awaited, but notes the effect of the new laws will only be known as each new provision is put to the test.

Further information about the ACL can be found at http://www.consumerlaw.gov.au.

JAMES FARRELL and JULIE CLARKE teach at the Deakin University School of Law.

(2012) 37(1) AltLJ 60
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