ACCC Presentation - Michael Jerabek
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The document is a presentation on the Competition and Consumer Act 2010 and the Australian Consumer Law, highlighting essential consumer rights, protections, and business obligations related to fair trading and consumer guarantees. Key topics include misleading conduct, unconscionable conduct, unfair contract terms, product safety, and strategies to protect businesses from scams. Furthermore, it offers resources for small businesses to better understand and comply with these laws.
ACCC Presentation - Michael Jerabek
- 1. Competition & Consumer Act 2010 & the Australian Consumer Law Miranda Chamber of Commerce Workshop 25 September 2013 Presented by Michael Jerabek Education & Engagement Manager (NSW & ACT)
- 2. Australian Competition & Consumer Commission National law enforcement agency responsible for administering the Competition and Consumer Act 2010, which aims to: • promote competition and fair trading; and • protect consumers NSW Fair Trading/Consumer Trader Tenancy Tribunal
- 3. What will I cover today? • Assessing your awareness of your rights and responsibilities under the CCA/ACL • Consumer guarantees & voluntary (express) warranties • Misleading & deceptive conduct/false & misleading representations • Unfair contract terms law • Unconscionable conduct • Product Safety • Small business scams • Restrictive trade practices • Other useful agencies • Q&A
- 4. Negotiating, selling and advertising… • ‘If you say something dishonest, you’re breaking the law, but not mentioning something is ok.’ • ‘A business owner can be liable for comments made on their business’ social media by 3rd parties if those comments are misleading.’ • ‘A statement may be true in fact yet be considered misleading in law.’ True or False?
- 5. Faulty goods and/or returns… • A customer tries to return a good purchased from you that is faulty due to a manufacturing defect but you refer her to the manufacturer instead as that is where the source of the problem lies Signs in store or online: • ‘Be warned - No refunds given under any circumstances’ • ‘No refunds given for change of mind’ • ‘Refund given on demand for goods in original condition’ What are the implications, if any, of the above?
- 6. Consumer guarantees Consumer guarantees apply to: • goods or services of any type up to $40,000 in value (and...) • purchased but also leased and hired • online, over the phone or in person • both new & second hand Consumer guarantees do NOT apply to: • one-off sales (e.g. private sales such as car or garage sale) • buying to on-sell (e.g. car repairer purchasing parts to be used in repairs) • If consumers simply change their minds • If consumers misuse the goods • If purpose not specified and not obvious from the circumstances
- 7. Nine consumer guarantees applying to goods: • Acceptable quality (acceptable appearance & finish, free from defects, safe & durable) • Reasonably fit for purpose • Description is accurate • Goods match sample • Reasonable availability of spare parts & repair facilities for reasonable length of time • Voluntary (express) warranties to be satisfied • Suppliers guarantee clear title • Suppliers guarantees undisturbed possession • Goods to be free of hidden securities or charges If any of these guarantees are not met, the consumer has a right to a remedy.
- 8. Three consumer guarantees applying to services A supplier must meet the consumer guarantees of providing services: • with due care and skill • which are fit for any specified purpose • within a reasonable time (when no time is set) If any of these guarantees are not met, the consumer has a right to a remedy.
- 9. Consumer guarantees – important concepts • Major failure • Minor failure • Consequential loss • Rejection period • Trader’s v manufacturer’s/importer’s responsibility • Consumer guarantees v voluntary warranties
- 10. Misleading & Deceptive Conduct It is unlawful for a business to make statements in trade or commerce that: • are misleading or deceptive, or • are likely to mislead or deceive • Failing to disclose relevant information, promises, opinions and predictions can be misleading/deceptive • Advertisements, promotions, quotations, statements and any representations made by a person are included • ‘Small print’ and disclaimers no excuse • Overall impression considered
- 11. False & Misleading Representations • It is unlawful for a business to make false or misleading representations about goods or services when supplying, offering to supply or promoting them • An offence punishable by a fine of up to $220,000 for an individual and $1.1 million for a body corporate • Representations can be made: – Verbally or in writing – In person, online, over the phone or through correspondence – In packaging/promotional material – Through words, pictures or symbols or combination thereof
- 12. A business must not make false or misleading representations about: • standard, quality, value or grade of goods & services • place of origin of a product • buyer’s need for the goods or services and whether the goods are new (also their history & use) • sponsorship, approval, performance, benefits and uses of goods and services • price of goods and services • any guarantee, warranty or condition Also: • Whether a representation is misleading may depend on the characteristics of a specific group • A representation can be misleading even if it s true or partly true
- 13. Advertising & Selling • Comparative advertising (use with caution) – Is the comparison accurate? – Are the products/services similar? – Is the comparison valid for life of promotion? • Two-price advertising (use with caution) – Was / now price; RRP / sale price – Price comparisons must be accurate & genuine – Sufficient number of goods must be sold at previous price for reasonable period – Goods must be actually sold at RRP • Clarity in Pricing – If component prices are used, single total price must be provided
- 14. Unconscionable conduct • Under the ACL unconscionable conduct covers business to business transactions as well as business to consumer transactions • UC can be described as behaviour which is irreconcilable with what is right or reasonable and is seen as harsh and/or oppressive • Usually involves a stronger party exploiting its bargaining advantage to impose terms or conditions that are unreasonable or against good conscience towards a smaller or weaker party
- 15. Some examples of possible unconscionable conduct • Failing to disclose important contractual terms • Not allowing sufficient time for consumer to read agreement, seek advice, ask questions & decide • Refusing to deal with legitimate complaints • Not explaining terms of contract to consumers from NESB • Using friends/relatives to influence decision-making • Refusing to accept ‘No’ for an answer
- 16. Unfair contract terms • ACL enables a court to find a contract term unfair & declare it to be VOID (treated as if it never existed) • Applies to standard form contracts including written and oral – over the phone or face to face. • Applies to contracts entered into on or after 1 July 2010, and terms of contracts altered on or after 1 July 2010 • Contract remains binding to the extent that it can operate without the unfair term
- 17. Unfair contract term test • Does the term create a significant imbalance between rights and obligations of the two parties? • Is the term reasonably necessary to protect legitimate interests of the business? • Would the term cause a detriment (financial or non- financial) if the business tried to enforce it? • How transparent is the term?
- 18. Product Safety • Imposing mandatory safety standards • Product testing • Issuing public safety warning notices • Issuing compulsory recall notices • Banning unsafe products • Mandatory reporting www.productsafety.gov.au www.recalls.gov.au
- 19. Small business scams • Overpayment scams • Directory entry/unauthorised advertising scams • Domain name scam • Office supply scam • Email intercept scam • Ransomware scam
- 20. Protecting your business from scams • Have clear procedures for verifying, paying and managing accounts and invoices • Limit number of staff authorised to place orders & pay invoices • Keep filing & accounting system well organised • Make sure the business billing you is the one you normally deal with, verify ID of person speaking to you & who they represent • Install reputable computer protection software & firewall • Subscribe to scam notification service: www.scamwatch.gov.au • Do not agree to deals/offers straight away – if it sounds too good to be true, it probably is!
- 21. Selling goods online Whether you’re trading online or through a retail outlet, your customers’ legal rights are the same: •Right to accurate information •Right to a fair contract •Right to a safe product •Right to repair, refund or replacement Australian Guidelines for Electronic Commerce 2006 (Australian Government Treasury) – ‘Best Practice’ model
- 22. Restrictive Trade Practices • Cartel conduct (s.44) • Anti-competitive agreements (s.45) • Misuse of market power (s.46) • Exclusive dealing (s.47) • Resale price maintenance (s.48) • Prohibition of acquisitions (s.50)
- 23. New ACCC resource available Free online education program for small businesses on Australia’s competition and consumer laws www.ccaeducationprograms.org
- 24. Purpose & content of program • Access this free online education program, funded by the ACCC, to learn more about your rights & obligations under the Competition and Consumer Act 2010 • There are 10 modules, covering the following topics: Misleading conduct & advertising Consumer contracts Pricing & unfair selling practices Unconscionable conduct Consumer rights & guarantees Exclusive dealing Selling safe products Cartels Scams Misuse of market power
- 25. Further information • Call the ACCC Infocentre – 1300 302 502 • Visit www.accc.gov.au • Visit www.productsafety.gov.au • Visit www.scamwatch.gov.au • Visit www.consumerlaw.gov.au • Subscribe to the ACCC Small Business Information Network for regular fair trading email updates
- 26. Other useful agencies • NSW Small Business Commissioner (advocacy, advice & mediation) web: http://www.smallbusiness.nsw.gov.au Infoline: 1300-795-534 or 8222-4800 • NSW Fair Trading (education, licencing & compliance) web: www.fairtrading.nsw.gov.au Infoline: 13-32-20 • ASIC web: www.asic.gov.au Infoline: 1300-300-630
- 27. Open forum Any questions arising from the checklist or the presentation?
- 28. Small business self assessment checklist • You have 15 minutes to complete the checklist • Write down any questions that may come up for you • Feel free to discuss with your neighbour/s when finished