One month until new consumer laws come into effect - what you need to do now

Articles Written by Sar Katdare (Partner)

On 1 January 2011, Australia's consumer protection laws will be replaced by new legislation. While the majority of the new laws do not substantially change your existing obligations when dealing with consumers and businesses, there are some new provisions which will affect all suppliers of consumer type goods or services.

This article tells you what you need to do now and early next year to ensure compliance with the new laws and address risks.

What you need to do now (and early next year)

We recommend that you do the following now

  • Amend your compliance training manuals and programs and any commercial pro forma documents by replacing references to the Trade Practices Act 1974 (TPA) and its provisions and sections with the Competition and Consumer Act 2010 (CCA) and its new provisions and sections.
  • Amend such documents by replacing references to old implied warranties with new consumer guarantees as necessary.
  • Check that your pro forma documents do not exclude or restrict consumer guarantees or the prescribed remedies but be sure to take advantage of limiting your liability where possible.
  • Check that your quality control and assurance systems are working effectively.
  • Make sure that you have the capacity to supply services within a reasonable time of offering them where timing has not been agreed with the consumer.
  • Update your internal reporting systems to ensure that information received regarding a serious injury that may have been caused by a consumer type good or related service is accurately recorded and quickly elevated to appropriate staff to determine whether the ACCC needs to be immediately notified.

We recommend that you do the following before 1 July 2011

  • Amend your pro forma documents to meet the prescribed requirements if you repair goods that generate data or if you refurbish goods.

We recommend that you do the following before 1 January 2012

  • Amend your pro forma documents to meet the prescribed requirements if you give express warranties against defects.

Key issues and major changes

From 1 January 2011

A new national regime of "consumer guarantees" will replace the existing Commonwealth, State and Territory implied warranties

  • existing guarantees for goods that will not change in substance relate to title, undisturbed possession, fitness for disclosed purpose, correspondence with description/sample and availability of spare parts and facilities for repair.
  • new guarantees for goods relate to acceptable quality (expanding on the current warranty of merchantable quality), fitness for represented purpose and compliance with express warranties.
  • existing guarantees for services that will not change in substance relate to due care and skill and fitness for disclosed purpose.
  • new guarantees for services relate to supply within a reasonable time.
  • as previously was the case, you cannot exclude or restrict these guarantees but where goods or services are not of a kind ordinarily acquired for personal, domestic or household use, you can limit liability to replacement, repair or the cost thereof (for goods) and re-supply or the cost thereof (for services).
  • there will be new prescribed remedies available to consumers for non-compliance with consumer guarantees including refunds, replacements, compensation and costs.

A new national product safety regime will replace existing Commonwealth, State and Territory regimes

  • application of the regime will extend beyond goods to services including supply, installation or maintenance of consumer type goods.
  • the scope of safety standards, bans and recalls will expand beyond injury through normal use to include injury through reasonably foreseeable misuse.
  • any person in the supply chain that becomes aware that use or foreseeable misuse of consumer type goods or related services may have caused death, illness or serious injury must notify the Commonwealth Minister and the ACCC within 2 days (reports are kept confidential) - non-compliance is a criminal offence.

The Trade Practices Act 1974 will be called the Competition and Consumer Act 2010 but most provisions will remain the same in substance

  • the order and section numbers of the current provisions will change - for example, section 52 of the TPA will become section 18 of the CCA.

From 1 July 2011

  • repairers of goods that generate data (computers, phones etc) and repairers that refurbish goods will be required to give customers a notice in prescribed form using prescribed words before accepting goods for repair/refurbishment.

From 1 January 2012

  • suppliers that provide express warranties against defects will be required to do so in a prescribed form.

A reminder...

The above consumer law reforms follow on the back of the recently introduced single figure pricing laws, unfair terms regime, new penalties for breaches of consumer protection provisions and new enforcement powers given to the ACCC, including substantiation notices and infringement notices.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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