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Businesses have a responsibility towards their consumers. This isn’t just an ethical responsibility, it’s a legal one too.
Australian consumer rights are dictated by the Competition and Consumer Act 2010. The legislation contains Australian Consumer Law (ACL) provisions, which largely addresses the consumer protections we utilise today.
As the owner of a business, it’s imperative that you’re familiar with the ACL. As the ACL determines consumer rights all across Australia, it also works as a definite set of rules for businesses on acceptable conduct.
Moreover, there are provisions in the ACL that also aim to protect small businesses. Therefore, understanding the ACL isn’t just for upholding consumer rights, it’s also for better understanding your rights as a small business as well.
Keep reading to know more about consumer rights in Australia and your business’s responsibilities.
What Does The Competition And Consumer Act Cover?
The Competition and Consumer Act covers a wide range of matters. However, we’re going to talk about the ACL, which as we noted (see above) is found within the Act. The ACL is a Commonwealth legislation, meaning it is applicable all over Australia. Furthermore, all Australian courts and tribunals are able to enforce this legislation.
As a business owner, the main aspects of the ACL you need to be aware of include:
Consumer Guarantees: When a product or service is being sold, a basic set of rights need to be met such as refunds and warranties.
Unfair Business Practices: The ACL prohibits any conduct that will put consumers in a bad position unfairly, such as pressuring and harassing consumers.
Misleading or deceptive conduct: Businesses cannot carry out measures, make statements or omit anything that is likely to lead consumers to believe a false statement.
Unconscionable Conduct: According to the ACL, all conduct should be fair and reasonable.
Product safety: The ACL promotes a minimum standard of product quality as well as what should be done if products don’t meet these requirments.
Pricing and Payment: Businesses need to correctly display prices and price their items in line with ACL regulations. Similarly with payments, businesses should clearly state the types of payment they accept.
Advertising and Promotions: The ACL requires all claims made in promotions and advertisements to be true and reasonable. A business should be able to prove any claims they make.
Unsolicited Sales: Unsolicited sales tactics are also regulated by the ACL – if you choose to engage in these, it’s important to follow the rules correctly.
Keep in mind, the ACL isn’t the only legislation you’ll need to be on the lookout for as a business. It’s certainly one of the main ones. However, things like industry codes as well as state regulations may also impact your responsibilities as a business. It’s a wise idea to get in touch with a legal expert so they can let you know what laws apply to your specific business.
How Does Consumer Law Affect A Business?
Consumer law determines the conduct your business will operate with. The ACL will impact everything, from the standard of your products and services, to the warranties or refund policies your business provides.
The ACL has a lot of different provisions and sometimes, it can be hard to keep up with them. It’s not unknown for businesses to make mistakes and slip up on the odd occasion however, avoiding this situation altogether is the best case scenario. No matter your intentions, breaching the ACL can lead to legal penalties and your business’s reputation could also take a serious hit. It’s always better to stay prepared and be on top of things.
As A Business Owner, How Do I Comply With Consumer Laws?
Talking to an expert in Consumer Law is a good way to start. As a business owner, you should also have the right legal instruments working to properly fulfil your consumer law obligations.
This could be in the form of contracts, policies and other legal agreements. A few you may want to consider getting drafted include:
- Customer Contracts
- Disclaimers
- Service Agreements
- Website Copy Review
- Unsolicited Consumer Agreement
Every business is different, so a legal expert will be able to let you know the right ones for your venture. Legal agreements don’t just help your business comply with consumer regulations, they can also make a huge difference in providing protection for your business. It’s a worthy investment – talk to us about getting yours today.
Does Consumer Law Apply To Businesses As Well?
The ACL isn’t just there to protect the rights of consumers, it also looks out for small businesses as well. Not all the provisions in the ACL will apply to businesses – although that doesn’t mean your business doesn’t have these rights, it just means they’ll likely be provided by a different set of regulations.
For businesses, the ACL mainly protects them by ensuring consumer guarantees and prohibiting unfair contract terms.
Businesses obviously don’t just sell, they need to make purchases too. This could be products, supplies and even services. Like any other consumer, businesses are entitled to the basic rights that come with making a purchase or engaging a service. Therefore, it’s not just consumers that are entitled to protection under consumer guarantees, businesses are to.
In addition to consumer guarantees, the ACL looks out for small businesses by strictly banning the use of unfair terms in standard form contracts. As such, if your small business signs a contract that is considered to be standard form, it will be protected by the ACL provisions.
In 2023, the law regarding unfair contract terms was updated. If you’re not familiar with the new rules, you can read up on it in our article: Changes To Unfair Contract Term Laws Taking Place In November 2023.
What Is The Role Of The ACCC In Protecting Consumers?
When it comes to the ACL and consumer protection laws, the ACCC is one of the most important departments you need to be aware of. The Australian Competition and Consumer Commission (ACCC) is the main agency appointed to enforce the ACL.
The ACCC has a number of different roles, a few of them include:
- Providing information regarding the ACL
- Setting product standards and recalling unsafe products where necessary
- Investing claims made for a breach of the ACL
- Reviewing mergers and acquisitions to assess their impact on the market
- Addresses potentially anti-competitive behaviour
Essentially, the ACCC keeps an eye on the commercial market for any breaches of the law. If you happen to breach any ACL regulations, you may end up hearing from the ACCC when an investigation starts – however it’s best not to let it get to this stage and talk to a legal expert about your ACL obligations.
We also recommend staying updated on any ACCC related news, as the consumer market is always evolving and changing. If you have a Sprintlaw Membership, then we’ll keep you updated on everything ourselves.
Next Steps
The ACL plays a key role in providing the legal framework for consumer rights in Australia. Businesses need to be familiar with the ACL so they can be aware of their responsibilities under it. To summarise what we’ve discussed:
- Australian consumer rights are governed by the Competition and Consumer Act 2010, specifically the Australian Consumer Law (ACL) provisions
- The ACL is applicable nationwide and businesses must adhere to its rules for acceptable conduct
- The ACL covers aspects such as consumer guarantees, unfair business practices, misleading conduct, unconscionable conduct, product safety, pricing and payment, advertising, promotions and unsolicited sales
- Business owners should consider legal instruments like customer contracts, disclaimers, service agreements, website copy review, and unsolicited consumer agreements to comply with consumer laws
- The ACL also protects small businesses by ensuring consumer guarantees and prohibiting unfair contract terms in standard form contracts
- The Australian Competition and Consumer Commission (ACCC) plays a vital role in enforcing the ACL, providing information, setting product standards, investigating breaches, reviewing mergers, and addressing anti-competitive behaviour
If you would like a consultation on Australian consumer rights and business responsibilities, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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