Introducing the new Australian Consumer Law

4 March 2011
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Australian consumers and business alike will no longer need to trough through a myriad of up to 20 national, State and Territory laws to find out their respective rights and obligations. 

On 1 January 2011, the Australian Consumer Law (ACL) came into effect; and for the first time in Australia, consumers will have the same protections and expectations about business conduct no matter where they are in Australia. Likewise, businesses will have the same obligations and responsibilities wherever they operate in Australia.

Prior to the commencement of the ACL, the former Trade Practices Act 1974 (Cth) (TPA) imposed certain prohibitions on corporations when conducting trade or commerce.  It was up to the various State and Territory governments to make corresponding laws to regulate consumer protection and fair trading activities by businesses conducted by individuals.

The ACL is drafted so that it will be a law of the Commonwealth and of each State and Territory.  As a result, all of the provisions apply to the conduct of persons rather than corporations.  Each State or Territory has passed legislation to specify that the ACL applies in its jurisdiction.

The Government has hoped that the ACL will assist consumers to be more informed and thereby making better choices, driving competition and innovations in markets and the development of a seamless national economy.  The Productivity Commission estimated that this reform to produce a single national law concerning consumer protection and fair trading could provide annual benefits of between $1.5 to $4.5 billion to the Australian community.

Although a substantial part of the ACL was modelled after the TPA, important changes were introduced by the ACL.  These include, amongst others:

• a new set of national law on unfair contract terms, which provides that unfair terms in standard-form agreements for the supply or goods or services to consumer are void;
• a harmonised set of provisions about unfair practices and fair trading, including amendments and additions which reflect existing provisions in State and Territory consumer laws;
• a new set of national consumer guarantees provisions, which replaces laws on statutory conditions and warranties; and
• new national regimes for unsolicited consumer agreements, lay-by agreements, product safety and information standards.

The ACL will be administered by the Australian Competition and Consumer Commission and each State and Territory’s consumer law agency.