Consumer law

These Schemes Ain’t Loyal says ACCC Draft Report on Customer Loyalty Schemes

The Australian Competition & Consumer Commission (ACCC) recently released its draft report on customer loyalty schemes, which has raised concerns about the actual benefit to consumers of such schemes and the use (or rather misuse) of consumers’ data. Preliminary Findings and Concerns At a high level, the ACCC’s main concerns (as set out in the report) focus on the following key areas: whether consumers actually receive the benefits advertised by customer loyalty schemes; unilateral changes to loyalty scheme terms and conditions – such as reduction of ‘earn rates’ and ‘redemption values’; poor communication of how the respective schemes work – …

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Subscribed, Sealed, Delivered – Embracing the Subscription Box Retail Model

The Australian retail sector is experiencing significant structural change – and this leaves businesses with no choice other than to start thinking outside the box…or rather think about the box itself… Enter the subscription box. By paying a regular fee, subscribers can receive a recurring delivery of products, often picked for the customer by the supplier.  This model has gained traction in the US with several large clothing and accessory brands rolling out subscription services which looks set to transform the way customers access their favourite brands and products. However, as with any model that involves engaging with consumers in …

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Back to school: Consumer rights training required

The fast-paced retail environment poses a high risk for businesses to make false, misleading or deceptive representations about products and consumer rights under the Australian Consumer Law (ACL).  With the Australian Competition and Consumer Commission (ACCC) having the power to impose considerable pecuniary penalties, businesses should be aware of their obligations under the ACL and ensure that staff are given adequate training. Consumer Guarantees The ACL provides that certain guarantees attach to goods and services sold, leased or hired in Australia that have a retail value of less than $40,000, or are valued at over $40,000 but have been purchased …

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ACCC update: 2019 compliance and enforcement priorities announced

Last week, the Australian Consumer and Competition Commission (ACCC) announced its annual compliance and enforcement priorities for 2019. The list included a number of priorities that are particularly relevant and important for retail and consumer-facing businesses, including: consumer guarantees, particularly in relation to high value white goods and electrical goods; customer loyalty schemes; advertising practices on social media platforms; collection and use of consumer data; and franchising arrangements. This announcement comes as a timely reminder for businesses to ensure they are aware of, and have systems and processes in place to ensure compliance with, the Competition and Consumer Act 2010 …

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Don’t believe the hype: Online ratings and reviews under the microscope

Online ratings and reviews are perceived as a low cost, transparent and real-time way for consumers to make informed purchasing decisions and can therefore be highly influential. Over the past year, there have been a number of enforcement actions successfully brought by the ACCC for businesses manipulating reviews or ratings that appear on their website, or third party review platforms. There has been much media focus on online ratings and reviews both in Australia and internationally, including the well-publicised example of a ‘fake restaurant’ being the number 1 ranked restaurant in London on a major review platform. As an area …

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When a Fyre starts to burn: A cautionary tale in marketing

A private island in the Bahamas, an ‘immersive’ music festival experience, return flights on a private jet, luxury eco-friendly villas, world-class gourmet food and partying with supermodels… These were just a few of the representations that organisers made to entice approximately 5,000 ticket holders to attend the Fyre Festival in 2017. This high profile (and extreme!) example of a product or service not matching the marketing hype is a perfect case study for a hypothetical analysis of how the Australian Consumer Law (ACL) would apply if such an event was to occur in Australia. Australian Consumer Law False, Misleading and …

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It’s in the warranty: New mandatory wordings introduced

From 8 June 2019, businesses supplying services or the supply of goods and services together to consumers must include new mandatory text in any warranty issued to consumers against defects in their products. The amendments to the Competition and Consumer Regulations 2010 (Cth) now equip consumers with the same level of protection from warranties against defects for services as they currently do from warranties against defects for the supply of goods. As of June 2019, the following wording must be included in any warranty against defects given in connection with the supply of services, or goods & services: Services Our services …

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Returning faulty gifts: New year, new product returns?

There’s always that one present under the tree. It doesn’t quite fit right or maybe doesn’t work once plugged in…Remember to not only remain calm, but both consumers and retailers should also ensure that they are fully aware of their rights and obligations under the Australian Consumer Law (ACL). According to the ACCC website, the Australian competition watchdog received nearly 34,000 contacts about consumer guarantee related issues in 2018 alone – an increase of more than 17 per cent compared to 2017. This article will outline both the rights of consumers and obligations of businesses when dealing with the return …

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Digital marketing update: Shoppable content, unreal and nano influencers, virtual home assistants and ads in messaging apps

In a world of exponential technological growth, consumers make purchasing decisions across an array of media platforms. When developing new methods of delivering a personalised and convenient consumer experience across these platforms, businesses should therefore factor in the risks involved including the application of the Australian Consumer Law (ACL). In this update, we take a look at some of the predicted tech trends for 2019 and flag the associated legal issues you should bear in mind. Shoppable Content – In the footsteps of the Chinese app WeChat, Instagram is expected to roll out an in-app purchase feature this year, allowing users to …

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Marketing warfare series – Part III: Guerrilla marketing

What is guerrilla marketing? Guerrilla marketing involves unconventional or interactive campaigns that take consumers by surprise and typically attract social media attention for being so unexpected. These tactics allow businesses to repurpose their consumers’ environment to include their brand and are particularly attractive to small businesses looking for greater reach and impact at a lower cost than traditional marketing. This type of marketing can take many forms, including: publicity stunts (e.g. flash mobs or world record attempts); brand installations (e.g. giant statues of a product in prominent public places); transformation of everyday items into advertisements (e.g. park benches or dressing up …

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Consumer law update: Headline pricing and expanded investigatory powers

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. Headline pricing 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 …

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New federal gift card regulations

Ever find a gift card in your wallet from last Christmas, only to find out it’s already expired? The Federal Government is introducing new regulations that will make the rules relating to gift cards more consumer friendly.  Back in June this year, we reported on the changes to requirements for gift cards sold in NSW, which is available here. The newly released draft regulations and explanatory statement are contained in the Competition and Consumer Amendment (Gift Cards) Bill 2018 (Cth) (the Gift Cards Bill), which was undergoing  public consultation until the end of October. The Gift Cards Bill introduces three key requirements, including …

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Social Media Marketing and Advertising Update: The Rising Star of the ‘Micro Influencer’

Businesses are increasingly questioning the value of “celebrity” social media influencers and appear to be favouring partnerships with “micro influencers” as a more cost effective marketing strategy. A “micro influencer” is a social media user with between 1,000 to 90,000 followers who, like a traditional influencer, makes posts promoting products.  Their key advantages include use of products out of real loyalty to a brand (in some cases), smaller and more intimate followings and, as a result, the perception of genuine endorsements by their followers.  “Micro influencers” also require much lower remuneration, if any, and exist in greater abundance than “celebrity influencers”, and …

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Full Federal Court provides further insight into the use of ‘natural’ in product branding and advertising

Natural skin care products, natural beauty products, natural cosmetics…the list goes on.  These so called ‘natural’ products are on-trend and are in high demand in the Australian and Asia Pacific retail market.  The rise of consumer demand for natural products is a result of its association with health and wellness and as the Australian Competition and Consumer Commission (ACCC) described it, ‘Suggests that a product is superior because it has certain natural characteristics’. However, any business thinking of using such ‘natural’ claims on their labels must use caution and ensure that any such representations are not misleading and comply with the Australian …

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Be careful – consumer law penalties are set to increase!

Recently, the Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 (Cth) passed both houses of parliament, implementing changes to the maximum financial penalties for breaches of the Australian Consumer Law.   This gives effect to the proposals set out in the final report on the Australian Consumer Law Review conducted by Consumer Affairs Australia and New Zealand in April 2017. This means that the current financial penalties of a maximum $1.1 million for companies will be increased to the greater of: AUD $10 million; 3 times the value of the benefit received by the company (including any affiliates) from the offence that …

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