Australian Consumer Law Update

The Australian Consumer Law Update is designed to keep industry associations and businesses across Australia up-to-date with the introduction of the Australian Consumer Law (ACL).

This issue focuses on product safety and what you need to know about your rights and responsibilities under the ACL.

Forward any questions or comments about this Update to consumerlaw@services.nsw.gov.au

The Australian Consumer Law is approaching

The ACL commences on 1 January 2011.

This means that transactions for goods and services that take place before 1 January 2011 will continue to be covered by the Trade Practices Act 1974 and existing State and Territory consumer protection laws.

For example, goods sold in December during the pre and post Christmas sales will be covered by the existing implied conditions and warranties legislation, not the new consumer guarantees regime introduced by ACL - even if something goes wrong with them in 2011.

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Industry guides now available

In addition to the unfair contract term guide released mid 2010, four more guides have just been published:
  • consumer guarantees
  • avoiding unfair business practices
  • product safety
  • sales practices.
Download the guides from the Australian Consumer Law website.

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Online training on consumer guarantees

The ACCC has produced a consumer guarantees training module for business owners, managers and sales staff. The training explains the consumer guarantees provisions and the remedies available when a guarantee is not met.

View the training modules on the ACCC website.

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Regulations update and transitional arrangements

Regulations to give practical effect to the ACL have now been published. Importantly, the regulations provide some transitional arrangements to allow businesses to adjust to the new law. These transitional arrangements apply to some of the rules surrounding:
  • unsolicited selling
  • repair notices that suppliers must provide to consumers when they repair IT products or provide refurbished items
  • warranties against defects.
The transitional arrangements means that some important provisions of existing State and Territory legislation may continue to apply after 1 January - check with your local fair trading agency to see what applies or visit www.consumerlaw.gov.au

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Handling complaints or disputes

Once the new law commences, complaints or disputes will continue to be handled by the relevant State or Territory consumer protection agency as well as the ACCC. Contact your local consumer protection agency for more information on their procedures.

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Product safety laws - what you need to know

The national product safety regime under the Australian Consumer Law (ACL) allows Australian governments to regulate consumer goods and product related services by:
  • mandatory reporting requirements
  • issuing safety warning notices
  • banning products, either on an interim or permanent basis
  • imposing mandatory safety standards
  • issuing a compulsory recall notice that requires suppliers to recall a product.
It also outlines the responsibilities of suppliers, including:
  • what to do when a Minister bans a product or imposes a safety standard
  • when and how to recall consumer goods
  • what to do if a Minister issues a compulsory recall notice
  • when to report an incident associated with consumer goods and product-related services to the Commonwealth Minister
  • when manufacturers may be liable for loss or damage caused by a consumer good with a safety defect.
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Mandatory reporting requirements

Suppliers must notify the ACCC within 2 days of becoming aware that a consumer good or product related service they have supplied has, or may have, caused serious injury, illness or death.

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Safety warning notices

A Commonwealth, State or Territory Minister responsible for administering the ACL can publish a safety warning notice about consumer goods or product-related warning notice about consumer goods or product related services.

These notices warn the public that the good or service is under investigation or poses a risk.

When a warning notice is published, suppliers do not have to stop supplying that good or service. However, they should stay informed about its status.

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Bans

Bans can be placed on consumer goods or product related services in certain circumstances.

There are two types of bans:
  • An interim ban - imposed by any responsible Minister. An interim ban can last for 60 days and can be extended a further 60 days.
  • A permanent ban - may only be imposed by the Commonwealth Minister.
Failing to comply with a ban is an offence. The maximum fine is $220,000 for an individual, or $1.1 million for a body corporate.

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Mandatory safety standards

The Commonwealth Minister can impose mandatory safety standards that set specific requirements for consumer goods or product related services.

It is an offence to supply consumer goods or product-related services that do not comply with mandatory safety standards.

A supplier may be found guilty of a criminal offence if they fail to:
  • comply with a mandatory safety standard. The maximum fine is $220,000 for an individual, or $1.1million for a body corporate.
  • nominate a standard if required to do so by a consumer protection agency. The maximum fine is $4,400 for an individual, or $22,000 for a body corporate.
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Voluntary recalls

Suppliers should recall consumer goods as soon as they become aware the goods:
  • may cause injury
  • do not comply with a safety standard
  • are banned.
A supplier must notify the Commonwealth Minister within 2 days of when the decision to recall consumer goods is made. Failing to do so is an offence. The maximum fine is $3,300 for an individual or $16,650 for a body corporate.

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Compulsory recalls

A Commonwealth, State or Territory Minister responsible for administering the ACL can issue a compulsory recall notice for consumer goods that:
  • will or may cause injury
  • do not comply with a safety standard, or
  • are banned.
Suppliers must:
  • comply with a compulsory recall notice
  • give notice to anyone they have supplied with the consumer goods outside of Australia
  • notify the responsible Minister within 10 days of issuing the notice.
The maximum fine for not complying with a compulsory recall notice is $220,000 for an individual or $1.1 million for a body corporate.

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When death, serious injury or illness occurs

Suppliers must notify the Commonwealth Minister within 2 days of becoming aware that a person suffered serious injury, illness or death associate with a consumer good or product-related service they supplied - either in Australia or overseas.

The maximum fine is $3,300 for an individual or $16,650 for a body corporate.

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Product liability

Consumers who suffer loss or damage because of defects in a manufacturer's goods can:
  • take the manufacturer to court. A court can award compensation to cover these losses.
  • make a complaint to a consumer protection agency, which may conciliate or take action on the consumer's behalf.
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For more information

For more information on the ACL, visit the links below:

www.consumerlaw.gov.au
www.productsafety.gov.au
Consumer law contacts

Merry Christmas and best wishes for the festive season!

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