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Consumer law review moots bigger fines for breaches

Consumer graphic.

Recommendations in the final report of the Australian Consumer Law Review, undertaken by Consumer Affairs Australia and New Zealand, will affect a number of retailers, life insurers and providers of consumer products and services if they are accepted by governments.

Peter Jones and Nicholas Boyle, partner and senior associate respectively at the law firm DLA Piper, said in a statement that the process had kicked off in 2015 and was a broad-ranging review of Australian Consumer Law "to assess the effectiveness of the provisions and protections and make any recommendations".

They pointed out that among the proposed changes was an increase in the maximum fines for breaching consumer law to align the penalties with those in other sections of the Competition and Consumer Act.

"Proposed maximum penalties for companies would be the greater of (a) $10 million or (b) three times the value of the benefit received by the company from the act/omission or (c) if the benefit cannot be determined, 10% of the annual turnover of the company in the previous 12 months," they wrote.

The review has also suggested increasing transparency in pre-selected pricing options for online shopping and ensuring that consumer guarantees apply to all online auctions.

Other key proposals are:

  • A new general safety provision requiring products to be tested by traders for safety, supported by a penalty regime for breaches of the new safety provision, plus expanded ACCC powers to obtain information about product safety;
  • Clarification of consumers' rights to refunds/replacements and what constitutes a "major failure", including clarifying where repeat defects or failures together constitute a "major failure";
  • Obligations to make additional disclosures to consumers when offering extended warranties for goods and/or services or warranties against defects;
  • The addition of a definition of "voluntary recalls", and an increase in penalties for failure/refusal to notify a voluntary recall;
  • The extension of unconscionable conduct protection to apply to publicly listed companies;
  • Expansion of the unfair contracts regime to include contracts regulated by the Insurance Contracts Act 1984;
  • Increasing the threshold in the definition of "consumer" from $40,000 to $100,000, noting that this would not apply retrospectively; and
  • A tightening of unsolicited selling provisions, specifically around public places, false bills, and where a supplier has obtained a consumer's details from a third party.

Jones and Boyle said it would be interesting to see how the Commonwealth, state and Territory governments responded to the report.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.