Australian Consumer Law is changing. Don’t get caught out thinking it doesn’t apply to you!

Nov 3, 2020

The Australian Consumer Law Schedule to the Competition and Consumer Act 2010 (Cth) (ACL) is changing.

From 1 July 2021, the monetary threshold for determining who is a ‘consumer’ – and therefore who is entitled to the various protections offered under the ACL – is increasing. This means that goods and services which were previously not subject to the consumer guarantee protections may be captured under the new regime.

Do you provide goods or services to ‘consumers’?

The ACL provides certain non-excludable consumer guarantees to ‘consumers’. These consumer guarantees include guarantees that goods and services are of acceptable quality and fit for purpose.

Under the current laws (and subject to some limited exemptions), a consumer is any person who has acquired goods or services if:

(a) The amount payable for the goods or services does not exceed $40,000;
(b) The goods or services were of a kind ordinarily acquired for personal, domestic or household use or consumption (regardless of the cost); or
(c) The goods are a vehicle or trailer acquired for use principally in the transport of goods on public roads.

Importantly, a company can be a ‘consumer’ if the relevant criteria are met.

Where products or services do not meet one or more of the applicable consumer guarantees, a ‘consumer’ can claim a remedy pursuant to the ACL, which may include repair, replacement or refund depending on the actual defect or failure in the goods or services. In some cases, compensation for loss and damages may also be payable.

What are the changes and what do they mean for you?

The Treasury Laws Amendment (Acquisition as Consumers – Financial Thresholds) Regulations 2020 (Cth) change the financial threshold within the ACL definition of ‘consumer’ from $40,000 to $100,000, extending the definition of ‘consumer’ under the ACL.

This change will be effective from 1 July 2021, and means that goods and services that were previously not covered by the ACL may subsequently become subject to the automatic consumer guarantee protections.

What should you do?

To ensure you don’t get caught out, you should:

• assess what goods and services you provide which may be subject to the ACL (both now, and after 1 July 2021);
• review your sale and supply contracts to ensure they comply with the requirements of the ACL; and
• educate employees in relation to the new obligations, including how requests for repairs, replacements and refunds will be managed in accordance with the ACL.

If you need further advice, or assistance to prepare for the changes to the ACL, the KKI Commercial Team can help.