Hear what happened in Canberra?
No, not that.

All eyes have been on the Australian Prime Minister this month, but you may have missed the news that Parliament has passed consumer protection laws. These laws expose Australian businesses to significant risk.

The Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 (Cth) will soon become law. Do not let the innocuous title of this Bill deceive you. This new law significantly bolsters the ACCC’s primary enforcement tool under the Australian Consumer Law: seeking court-ordered penalties.

The ACCC may seek penalties against a company it claims has:

  • made false or misleading representations about goods or services;
  • engaged in unconscionable conduct; or
  • contravened certain other sections of the Australian Consumer Law.

The changes to the maximum penalties for certain contraventions of the Australian Consumer Law are summarised below:

Current law New law
Maximum penalty for corporations: $1.1 million. Maximum penalty for companies is the greater of:  

  • $10 million; or
  • if the court can determine the value of the benefit obtained from the offence, act or omission by the company and any related bodies corporate – 3 times the value of the benefit; or
  • if the court cannot determine the value of the benefit – 10% of the annual turnover of the company and any related bodies corporate during a specific 12 month period (exceptions apply).

We expect the ACCC to begin seeking significantly higher penalties when court action is brought against companies. Rod Sims, the ACCC Chair, recently stated that the ACCC will be having ‘very different discussions … to resolve matters when it comes to agreed penalties’.

It is more important than ever to ensure your company has a robust consumer law compliance regime in place, including providing training for customer-facing employees.

Get in touch with Bespoke for assistance with ensuring your company’s marketing material, terms and conditions, returns policies and customer service processes are Australian Consumer Law compliant.

It is easy for businesses to miss important changes to laws that affect their daily operations for a variety of reasons. These changes should not be missed, particularly where penalties will now be hitting tens of millions of dollars.

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Posted on: 31 August 2018