Competition and Consumer Act Schedule 2 (ACL): What You Need to Know

If you sell goods or services in Australia, the Competition and Consumer Act 2010 (Cth) - Schedule 2 - applies to you. Schedule 2 is the Australian Consumer Law (ACL). It sets out rules around fair trading, advertising, pricing, refunds, contract terms and more.

The good news? With a bit of planning, you can build simple systems that keep you compliant and protect your brand. In this guide, we’ll break down what Schedule 2 covers, the rules most small businesses trip over, and practical steps to get your contracts, policies and team in shape.

Let’s unpack what the ACL means for your business and how to set it up the right way from day one.

What Is Schedule 2 Of The Competition And Consumer Act?

Schedule 2 of the Competition and Consumer Act is the Australian Consumer Law (ACL). It’s a single, national set of consumer protection rules that applies across all states and territories in Australia.

The ACL is enforced mainly by the Australian Competition and Consumer Commission (ACCC), and state and territory consumer protection bodies. It covers how you advertise, price, contract with, and provide remedies to your customers - whether you operate online, in-store, or both.

Key ACL themes include honesty in marketing, mandatory consumer guarantees, bans on unfair practices, and protections against unfair contract terms. If your business deals with consumers (and many B2B transactions too), these rules are not optional.

Why The ACL Matters For Small Businesses

Small businesses often compete on trust. The ACL helps you build that trust by setting clear standards for dealing with customers. It also reduces the risk of heavy penalties, costly disputes and reputational damage.

From a practical point of view, clear ACL-compliant terms, policies and training will help your team answer refund requests consistently, run promotional campaigns safely and resolve complaints fast. That saves time and keeps customers onside.

Key ACL Rules You Need To Know

Misleading Or Deceptive Conduct (Section 18)

You must not engage in conduct that is likely to mislead or deceive. This is a broad obligation - it applies to ads, website copy, sales calls, social media posts, product packaging and even silence in some contexts.

Typical risks include overstating features or results, using fine print that contradicts the main message, or implying endorsements that don’t exist. Building sign-off processes for marketing material is essential. For a deeper dive, see section 18.

False Or Misleading Representations (Section 29)

Section 29 bans specific types of false claims, such as statements about price, quality, origin, testimonials, or “on sale” promotions that aren’t genuine. If you’re comparing prices or running short-term discounts, keep records to back it up. Read more on section 29.

Pricing And Advertising Rules

Prices must be accurate and clear, and generally you must display a single price that includes mandatory fees and charges. Drip pricing, bait advertising and unclear comparison pricing are common pitfalls. If you promote discounts, make sure your “was/now” pricing is substantiated and not misleading. See the guide to Advertised Price Laws to sense-check your campaign plans.

Consumer Guarantees

The ACL builds in non‑excludable guarantees - for example, that goods are of acceptable quality and match their description, and services are provided with due care and skill and within a reasonable time. If a product or service fails to meet these guarantees, you must provide a remedy (repair, replacement, refund or repeat service) depending on whether it’s a minor or major failure.

Importantly, you cannot tell customers “no refunds” where consumer guarantees apply. Your refund wording and frontline scripts should reflect this.

Warranties Against Defects (Voluntary Warranties)

If you offer your own voluntary warranty (for example, “12‑month warranty”), the ACL requires specific wording and disclosures. You also can’t use a voluntary warranty to limit consumer guarantees. If you offer warranties, have a compliant Warranties Against Defects Policy and make sure staff understand how it interacts with consumer guarantees.

Unfair Contract Terms (UCT) Regime

The ACL protects consumers and many small businesses against unfair terms in standard form contracts (think: one‑sided liability caps, automatic renewals without clear notice, or broad unilateral variation rights). Unfair terms can be void, and recent reforms have introduced penalties for proposing or relying on them in many cases. Have your templates reviewed - a tailored UCT review can significantly reduce risk.

Product Safety, Bans And Recalls

Certain products have mandatory safety standards and information requirements (for example, button batteries). The ACCC can impose bans or require recalls. If you design, import or sell products, monitor relevant product safety standards and set up a recall plan.

Unsolicited Sales, Gift Cards And Lay‑By

Door-to-door sales, telemarketing, gift card expiry periods and lay‑by terms each have specific rules under the ACL. If these apply to your business model, train your team and ensure scripts and terms are compliant.

How To Build An ACL Compliance Program

1) Map Your Customer Journey

List where you make claims or promises: ads, product pages, checkout, onboarding emails, sales calls, invoices, warranties and returns. Every touchpoint is a potential compliance risk or opportunity to reduce complaints.

2) Set Clear Sign‑Off Processes

Require legal or senior review for campaigns, price promotions and major website changes. Make it a habit to ask: Is the overall impression accurate? Is the fine print consistent with the headline? Do we have evidence to back claims?

3) Standardise Refund And Complaint Handling

Write simple scripts and FAQs that reflect consumer guarantees and your voluntary warranties. Give staff clear authority to resolve common issues quickly. Consistency reduces legal risk and saves time.

4) Fix Your Contract Templates

Make sure your customer terms are clear, fair and balanced. Avoid broad disclaimers that conflict with consumer guarantees. If you sell online, ensure your Website Terms and Conditions and checkout disclosures align with your operational reality.

5) Keep Clean Records

Keep evidence for comparative claims, discount periods, supply constraints and major representations. Good records make it easier to respond to inquiries and defend your position.

6) Train Your Team

Short, practical training beats a booklet nobody reads. Walk through real scenarios you see in your business - refunds, faulty goods, delayed deliveries, “price match” requests - and show staff how to apply the rules.

Contracts And Documents That Support ACL Compliance

Strong, plain‑English documents help you set expectations, reduce disputes and demonstrate a compliance culture. Consider putting the following in place (tailored to your business):

• Terms Of Trade: Sets out pricing, delivery, scope, timelines, payment terms, remedies and limitations in a clear, balanced way. A well‑drafted set of Terms of Trade can significantly reduce uncertainty.
• Website Terms And Conditions: If you sell or take bookings online, your Website Terms and Conditions should cover ordering, shipping, returns, and acceptable use, and sit neatly with your refund policy.
• Privacy Policy: If you collect personal information, a compliant Privacy Policy is essential and should match your actual data practices (think sign‑ups, analytics, remarketing and support).
• Warranties Against Defects Policy: Where you offer voluntary warranties, a compliant Warranties Against Defects Policy and warranty statement (with mandatory wording) helps avoid ACL breaches.
• Refunds And Returns Policy: Clear, ACL‑aligned guidance on remedies for faulty goods or services, change‑of‑mind rules (if offered), and the process for customers to follow.
• Marketing And Promotions Guidelines: Internal playbook for pricing claims, discount structures, influencer content and testimonials to avoid misleading representations.
• Standard Supplier Agreements: Back‑to‑back obligations with your suppliers on quality, timelines, recalls and indemnities so you can meet your own ACL obligations downstream.

Not every business needs every document. The aim is to keep your customer experience consistent with the ACL and make sure promises in your marketing match your operational capacity.

Common ACL Pitfalls And How To Avoid Them

“No Refunds” Signs Or Scripts

Blanket “no refund” messages are risky. Replace with wording that acknowledges consumer guarantees and sets out the process for issues and change‑of‑mind (if you offer it).

Over‑Optimistic Advertising

Before you promote “best price” or “market‑leading results”, check you can substantiate it and that disclaimers don’t undermine the main message. Substantiation files (date‑stamped) are your friend.

Was/Now Pricing Without Records

If you promote a discount, ensure the item was genuinely offered at the “was” price for a reasonable period. Keep records to support your comparison. If you’re unsure about your approach, compare it against the principles in Advertised Price Laws.

Unfair Auto‑Renewals

Auto‑renewal can be acceptable, but not if key details are buried or you make cancellation unreasonably hard. Review your renewal notices, reminder timing and cancellation process against the unfair contract terms regime - a UCT review can flag problems quickly.

Warranty Language That Undercuts Consumer Guarantees

A “12‑month warranty” does not cap consumer rights. Avoid wording that suggests otherwise, and include the mandatory statement where a voluntary warranty is offered via a compliant Warranties Against Defects Policy.

Complex Cancellation Or Late Fee Terms

Cancellation fees and late fees should reflect reasonable costs and be disclosed clearly up front. Ambiguous or punitive fees risk being unfair or misleading. If you charge fees, sense‑check them against your customer terms and refund processes.

Enforcement, Penalties And Remedies Under The ACL

The ACCC and state/territory regulators can investigate, accept court‑enforceable undertakings, and bring proceedings. Courts can impose significant penalties, issue injunctions and order corrective advertising. Individuals and businesses can also seek compensation, including under section 236.

Penalties for certain contraventions can be very high - well beyond the cost of getting your contracts and processes right. But most issues are avoidable with upfront planning, staff training and periodic reviews of your templates and campaigns.

Putting It All Together: A Simple ACL Checklist

• Audit your ads, website and sales scripts for accuracy and overall impression.
• Confirm your refund, warranty and complaints processes match the ACL.
• Refresh your customer terms (and online checkout disclosures) to remove unfair terms and ensure clarity.
• Prepare or update your Privacy Policy and cookies/marketing disclosures to reflect actual practices.
• Train your team using common scenarios you face each week.
• Keep evidence files for comparative and discount claims.
• Schedule a periodic legal review - especially before major campaigns or product launches.

Key Takeaways

• Schedule 2 of the Competition and Consumer Act is the Australian Consumer Law - it governs how you advertise, price, contract and provide remedies to customers.
• Focus on the high‑risk areas: misleading conduct, specific misrepresentations, consumer guarantees, unfair contract terms, and advertising/price promotions.
• Clear, balanced customer terms and practical policies (refunds, warranties, privacy) make day‑to‑day compliance easier and reduce disputes.
• Train your team, keep records for claims and promotions, and set approval processes for marketing and price changes.
• A short legal review of your contracts and campaign plans is far cheaper than penalties or reputational damage later.

If you’d like a consultation about putting ACL‑compliant contracts and policies in place for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.