The ACCC will recommend improvements in a number of key areas such as safety standards, penalties and unconscionable conduct, in the upcoming Consumer Law Review to be conducted by Consumer Affairs Australia and New Zealand in 2016.
The Consumer Law Review will review all aspects of the Australian Consumer Law (ACL), including the general prohibitions on misleading and deceptive conduct, prohibitions against specific unfair practices such as bait advertising and pyramid selling, the consumer guarantees and the product safety framework.
Chairman of the ACCC, Rod Sims, who delivered the keynote address to attendees of the Australian Consumer Law roundtable last week, said that the Consumer Law Review is a good opportunity to both examine the benefits of the ACL as it currently stands, and to improve those aspects which may not be achieving desired outcomes.
Mr Sims indicated that the ACCC will specifically focus on the following areas in the review:
- Penalties – increasing the maximum statutory pecuniary penalties available and establishing pecuniary penalties for breaches of the general prohibition against misleading and deceptive conduct;
- Unconscionable conduct – removing the current public company exception to the unconscionable conduct provisions so that publicly listed companies can rely on these provisions;
- Component Pricing – tackling the issue of unclear pricing structures so that consumers are aware of the full price of a product or service upfront;
- Safety Standards – integrating trusted international safety standards into Australian mandatory safety standards to reduce transaction costs and inefficiencies in having to draft and apply equivalent Australian safety standards;
- Phoenix Companies – ensuring that consumers have access to remedies where a company in breach of the consumer law is wound up, only to resurface as another entity which avoids the liabilities of the original company;
- Consumer Access to data – improving consumer access to relevant data and information so that they can make informed purchasing decisions; and
- Sharing Economy platforms – ensuring that the provisions of the ACL adequately address the consumer law issues raised in these types of transactions.
What this means for business
New and increased penalties for breaches of the ACL are likely to serve as a greater deterrent not only for small to medium enterprises, but to larger businesses as well.
The extension of pecuniary penalties to contraventions of the general prohibitions against misleading and deceptive will be a major and substantial change if it is adopted.
The proposed changes to the unconscionable conduct provisions means that businesses dealing with publicly listed companies must take steps to ensure that they are acting in good conscience and that the line between strong commercial bargaining and unconscionable conduct is not crossed.
Businesses will also need to ensure that their pricing structures are clear to consumers, and that there are no hidden fees or charges.
Though this may mean that some businesses will face increased compliance costs, it is clear that in the face of harsher penalties, it will be prudent to ensure that the practice and procedures of your business are compliant with the ACL.
When will the review commence?
The Consumer Law Review will commence in 2016 with a final report expected in March 2017. Whether the recommendations will be implemented in to Australian Law will remain to be seen.
If you would like further information on any of the material discussed in this article, please contact Judith Miller, National Practice Leader – Commerical, or Bindhu Holavanahalli – Lawyer.