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Contract and consumer law news | 2018

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2018

25 October 2018 - Rod Sims re-appointed ACCC Chair until 2022

ACCC Chair, Rod Sims, has been re-appointed for a third term. Sims was originally appointed in 2011 and his current term was due to expire in mid-2019; the re-appointment will see him remain in the position until (at least) 2022. Assuming Sims completes this term he will become the longest serving ACCC/TPC Chair.

See Government media release: The Hon Josh Frydenberg MP, 'Government extends term of the ACCC Chair' (25 October 2018)

10 October 2018 - Federal Court finds Birubi Art misled consumers over fake Indigenous Australian art

The Federal Court has found that Biubi Art Pty Ltd made false or misleading representations that products it sold (including boomerangs and digeridoos) were made in Australia and hand painted by Australian Aboriginal persons.

Justice Perry
[163] ... in my view Birubi, by representing in trade and commerce during the relevant period to consumers that the loose boomerangs, boxed boomerangs, bullroarers, didgeridoos and message stones were hand painted by Australian Aboriginal persons, engaged in misleading or deceptive conduct in breach of s 18 and subs 29(1)(a) of the ACL. As to the latter, the implied representation that the Products were hand painted by Australian Aboriginal persons was a false or misleading representation that they were of a particular style or had a particular history. I also consider that Birubi engaged in conduct that was “liable” (in the sense of more likely than not) to mislead the public into inferring that the boxed boomerangs, didgeridoos and message stones were hand painted by Australian Aboriginal persons in contravention of s 33 of the ACL, ...

[164] Furthermore, during the relevant period, by representing to consumers that the loose boomerangs, boxed boomerangs, bullroarers, didgeridoos and message stones were made in Australia, Birubi, in trade or commerce, engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL; and made false or misleading representations concerning the place of origin of goods in connection with the supply or possible supply of goods, or the promotion of the supply of goods, in contravention of subs 29(1)(k) of the ACL. ...

View ACCC media release (MR 216/18)

View ACCC v Birubi Art Pty Ltd [2018] FCA 1595

10 October 2018 - ACCC consulting on Compliance and enforcement policy and priorities

The ACCC is consulting on its 2019 compliance and enforcement policy and priorities and its product safety priorities.

You can share your views until 29 October 2018.

View consultation hub

Gift card20 September 2018 - Gift cards bill introduced

The Treasury Laws Amendment (Gift Cards) Bill 2018 was introduced and read for a first time in the House of Representatives today.

The new law, if passed, will require gift cards to have a minimum three year expiry period, will require disclosure of expiry information (prominently on the card) and will ban certain post-supply fees. The amendments will apply to gift cards supplied on or after 1 November 2019.

The laws will apply to gift cards even if they are 'financial products' which are otherwise excluded from the Australian Consumer Law.

The bill implements the reforms announced on 19 June 2018 by then Assistant Minister to the Treasurer, the Hon Michael Sukkar MP.

View Bills page.

View ComLaw page.

View Competition and Consumer Amendment (Gift Cards) Bill 2018 consultation page
(Consultation between 26 July 2018 - 9 August 2018)

View Gift Card Expiry Dates consultation
(Consultation between 2-30 May 2018)

Case icon19 September 2018 - Unconscionable conduct: Full Court upholds appeal by Unique College

The Full Federal Court has upheld an appeal by Unique International College Pty Ltd, finding that it did not engage in unconscionable conduct regarding the enrolments of volunerable consumers.

The Federal Court (Justice Perram) had previously found 'Unique had engaged in systemic unconscionable conduct in New South Wales by targeting disadvantaged consumers with offers of free laptops, providing financial incentives to its sales representatives, and hosting sign-up meetings to enrol students.' (ACCC media release, 19 Sept)

Unique did not appeal in relation to the Federal Court's findings that it engaged in misleading and deceptive conduct and unconscionable conduct in relation to five specific consumers.

Case icon19 September 2018 - Unconscionable and misleading conduct: Federal Court finds against training college

The Federal Court found a training college engaged in unconscionable and misleading conduct and made 'false or misleading representations when enrolling consumers into diploma courses:

31 August 2018 - Consumer law penalties increase

The Federal Parliament has passed legislation to increase maximum financial penalties under the Australian Consumer Law. Royal Assent was received on 31 August 2018 and the effect of new penalty provisions take effect on 1 September (the day after Royal Assent)

The existing maximum penalties are $1.1million. Maximum penalties will rise to the same as those available for competition law breaches under the Act: $10m or three times the value of benefit received or (if that can't be determined) 10% of annual turnover in the preceding 12 months. Penalties against individuals will rise from $220,000 to $500,000 per breach.

The explanatory memorandum states:

1.1 Schedule 1 to this Bill amends the ACL, to strengthen and align the maximum penalties under the ACL with the maximum penalties under the competition provisions of the CCA.

...

1.6 The ACL Review found that the current maximum penalties available in the ACL are insufficient to deter non-compliant conduct that can be highly profitable. Some entities see these penalties as ‘a cost of doing business’.

...

1.9 The ACL Review proposed increasing the maximum financial penalties available under the ACL by aligning the penalties with the penalty regime under the competition provisions in the CCA.

Summary of new law

1.10 Schedule 1 to this Bill aligns the existing ACL penalties with the existing maximum penalties under the competition provisions in the CCA, in order to strengthen the penalties regime, deter non-compliant conduct and reduce the financial benefits and incentives for businesses to engage in conduct in breach of the ACL.

The new penalty regime applies in relation to unconscionable conduct (ss 20-21), unfair practices (ss 29-37; ss 39-40; ss 43-44; s 48-50), safety of consumer goods and product related services (ss 106-107; ss 118-119, s 127) and information standards (ss 136-137). The EM includes a table setting out the provisions to which it applies:

Explanatory memorandum Table 1.1 [pages 10-11]

Conduct Civil Criminal
Unconscionable conduct
Engage in unconscionable conduct section 20 no equivalent
Engage in unconscionable conduct for the supply or acquisition of goods or services section 21 no equivalent
Unfair practices
False or misleading representations about goods or services section 29 section 151
False or misleading representations about sale of land section 30 section 152
Misleading conduct relating to employment section 31 section 153
Offering, with the intention of not providing, rebates, gifts, prizes section 32 section 154
Misleading conduct as to the nature of goods section 33 section 155
Misleading conduct as to the nature of services section 34 section 156
Bait advertising section 35 section 157
Wrongly accepting payment section 36 section 158
Misleading representations about certain business activities section 37 section 159
Unsolicited supply of cards section 39 section 161
Assertion of a right to payment for unsolicited goods or services section 40 section 162
Assertion of a right to payment for unauthorised entries or advertisements section 43 section 163
Participation in pyramid schemes section 44 section 164
Making a representation that an amount constitutes part of the consideration for goods or services section 48 section 166
Unfair practices
Referral selling section 49 section 167
Harassment or coercion in connection with the supply or payment of a good or service, or sale or payment of land section 50 section 168
Safety of consumer goods and product related services
Supplying consumer goods that do not comply with safety standards section 106 section 194
Supplying product related services that do not comply with safety standards section 107 section 195
Supplying consumer goods covered by a ban section 118 section 197
Supplying product related services covered by a ban section 119 section 198
Non-compliance with a recall notice section 127 section 199
Information standards
Supplying goods that do not comply with information standards section 136 section 203
Supplying services that do not comply with information standards section 137 section 204

 

The change has been made by amending ss 151-159, 161-164; 166-168, 194-195, 197-198-199, 203-204, 224 in Schedule 2. The new penalty references take the following form (this relates to s 151 - different sub-section numbering and cross references apply to the other sections of the Act (yes it's duplicated a lot!):

Penalty

(5) An offence against subsection (1) committed by a body corporate is punishable on conviction by a fine of not more than the greater of the following:

(a) $10,000,000;

(b) if the court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, have obtained directly or indirectly and that is reasonably attributable to the commission of the offence - 3 times the value of that benefit;

(c) if the court cannot determine the value of that benefit - 10% of the annual turnover of the body corporate during the 12-month period ending at the end of the month in which the body corporate committed, or began committing, the offence.

(6) An offence against subsection (1) committed by a person other than a body corporate is punishable on conviction by a fine of not more than $500,000.

See also