consumer guarantees

Calling all Consumers – it is your day!

Published On 03/04/2013 | By Alysia Abeyratne | Consumer protection

Friday, 15 March 2013 was ‘World Consumer Rights Day.’  On this day, Chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, took the time to restate the ACCC’s commitment to championing the rights of consumers, with a particular focus on a number of key priorities, including the consumer guarantees regime.

The consumer guarantees regime is contained in Part 3-2, Division 1 of the Australian Consumer Law (ACL), which is located in Schedule 2 of the Competition and Consumer Act 2010 (Cth).  The consumer guarantees provisions in the ACL replace the previous regime governed by a number of pieces of legislation including the Trade Practices Act 1974 (Cth) and State and Territory fair trading and sale of goods laws.

Under the ACL, consumers have a statutory right to take action against the supplier or manufacturer and seek a broader range of remedies in circumstances where the goods or services do not comply with the guarantees set out in the ACL. Depending on the nature of the defect, consumers may be entitled to a refund where goods breach these guarantees.

What is interesting is the way in which rights under the consumer guarantees regime are being championed.

Last year we saw the ACCC institute proceedings against various Harvey Norman franchisees and against Hewlett Packard for allegedly making false or misleading representations to consumers regarding their rights under the consumer guarantees.  Engaging in this kind of conduct may attract a pecuniary penalty under section 29(l),(m) or (n) of the ACL. This week, Super A-Mart paid two infringement notices totalling $13,200 for statements it made regarding the application of the consumer guarantees regime to certain furniture items.

What we have not seen, however, are cases actually testing the consumer guarantees provisions themselves.

Consumers are guaranteed that goods subject to the regime will be of “acceptable quality”.  When is a product of “acceptable quality”?  When is a failure a “major” or “minor” failure?  These are concepts that are not applied or understood in practice by consumers and businesses alike.  It requires consideration of what a reasonable consumer would expect in terms of appearance, durability and the extent of defects of a product.

If the ACCC is serious about testing the new provisions, it is these types of issues that would be tested in Court and not issues about when statements made are misleading.  There is already plenty of jurisprudence about false statements and misleading and deceptive conduct.

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About The Author

Alysia Abeyratne is a solicitor in the Melbourne office of King & Wood Mallesons specialising in competition, consumer protection and general commercial law.

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