- Posted by DLA Piper Retail Thera-IP Team
- On 13 November 2018
On 26 October 2018, the Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 (Cth) came into effect, amending a number of key provisions of the Australian Consumer Law (ACL) and extending investigatory powers available to the Australian Consumer and Competition Commission (ACCC) and Australian Securities and Investments Commission (ASIC). This comes as a timely reminder for businesses to ensure compliance with the ACL and particularly the changes to headline pricing practices.
From 26 October 2019, vendors (i.e. any business or individual selling goods or services) will be required to include all optional fees and charges that are pre-selected by the vendor in headline prices displayed to promote and/or supply goods and services. For example, when purchasing airline tickets, vendors often pre-select a carbon offset charge that is not shown in the advertised price of the flights. In many cases, it is not obvious to consumers that these additional charges that appear at checkout have been pre-selected by the vendor and consumers may opt out.
This change presents a risk for travel and financial product aggregation service providers that rely on, and advertise, third party prices. These service providers will need to ensure that their pricing is compliant and verify the pricing policies of the third party vendors they advertise. Notably, vendors will have a year to develop and modify their pricing policies to ensure that they do not contravene this new law.
Expanded Investigatory Powers
Now in effect, the ACCC has broader powers to compel production of information about unsafe products from third parties that possess relevant information, documents, or evidence about the safety of goods or services. This includes other traders, test laboratories, safety consultants, injured persons, or consumers that have purchased the hazardous goods or services where previously only disclosure notices could be issued to suppliers of consumer goods or product related services. This will allow for more extensive investigations into unsafe products and greater accuracy in assessing risk involved with on-going supply.
Similarly, the ACCC and ASIC now have broad powers to investigate whether a contract term is unfair, without limitation to instances where there has been a contravention or the possibility of a contravention. These powers only apply to contracts entered into on or after 26 October 2018.
Other amendments include:
- Consumer guarantees – a consignor of goods must provide consumer guarantees for the transport and/or storage of the goods, if the consignee is a consumer;
- Unsolicited consumer agreements – an unsolicited consumer agreement can be entered into in a public place – for example, a person is approached on the street to buy services;
- Unsolicited services provisions – the definition of unsolicited services has been amended so that these provisions will operate to include services that were not requested and/or actually supplied;
- Unconscionable conduct – unconscionable conduct protections have been extended to publicly listed companies;
- Financial products – consumer protection provisions under the ACL relating to financial services now also apply to financial products under the ASIC Act;
- Evidentiary requirements – a party bringing an action under the ACL now may rely on an admission of fact and findings of fact made in other court proceedings as prima facie evidence. This becomes an important consideration for businesses facing concurrent or possible future proceedings when evaluating risk around making an admission of fact; and
- Community service orders – courts now have the power to order a person who has breached the ACL to engage a third party to perform community service. This might be ordered in circumstances where the person in breach is not qualified or it is inappropriate that they give effect to the community service order. For example, where a person has caused financial harm to low-income vulnerable consumers by providing financial counselling, they may engage a third party to provide counselling to remedy the harm.
All of these amendments have commenced with the exception of headline pricing requirements which will not take effect until 26 October 2019.
This post was co-authored by Alexandra de Zwart, Valiant Warzecha, Jessie Buchan and Melinda Upton.