‘Consumer’ threshold increased to $100,000 – is your business ready?
Suppliers who provide goods or services valued up to $100,000 to any person (including large businesses, and regardless of intended use) are now subject to certain provisions of the Australian Consumer Law (ACL). This change, which amends the definition of ‘consumer’ to cover purchases up to $100,000 (up from $40,000) came into effect on 1 July 2021. definition of consumer
The changes are particularly relevant for business-to-business transactions which may have previously been above the $40,000 cap, but are now subject to the ACL and in particular, the statutory consumer guarantees regime.
Equivalent changes apply to the ASIC Act, meaning a wider range of financial services are now also covered by key aspects of the consumer protection laws. definition of consumer
The increased monetary threshold was passed in July 2020, giving businesses a year to prepare so we expect regulators to take an active approach to any complaints and enforcement from now on, and are unlikely to be lenient to businesses caught unaware.
Suppliers should ensure they have reviewed their current offerings, assessed their terms, conditions, and warranty policies to ensure they aren’t misleading consumers and have mitigated their exposure where possible.
For more details about what this means for your business and/or you as a consumer (under the new threshold), check out our client alert here.
This change is additional to the relatively new disclosure obligations to consumers required under s47A and s47B of the Fair Trading Act (NSW). The new provisions require businesses to “take all reasonable steps” to ensure consumers are aware of the “substance and effect” of terms and conditions which “may substantially prejudice” their interests. Our note on these provisions is available here.
By Jessica Waters and Carmen Gawthorpe