ACCC Presentation - Michael Jerabek

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On 25 September, Michael Jerabek from the Australian Competition and Consumer Commission addressed the MDCC about such topics as small businesses & the Competition and Consumer Act, advertising & selling, social media and much more.

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ACCC Presentation - Michael Jerabek

  1. 1. Competition & Consumer Act 2010 & the Australian Consumer Law Miranda Chamber of Commerce Workshop 25 September 2013 Presented by Michael Jerabek Education & Engagement Manager (NSW & ACT)
  2. 2. Australian Competition & Consumer Commission National law enforcement agency responsible for administering the Competition and Consumer Act 2010, which aims to: • promote competition and fair trading; and • protect consumers NSW Fair Trading/Consumer Trader Tenancy Tribunal
  3. 3. What will I cover today? • Assessing your awareness of your rights and responsibilities under the CCA/ACL • Consumer guarantees & voluntary (express) warranties • Misleading & deceptive conduct/false & misleading representations • Unfair contract terms law • Unconscionable conduct • Product Safety • Small business scams • Restrictive trade practices • Other useful agencies • Q&A
  4. 4. Negotiating, selling and advertising… • ‘If you say something dishonest, you’re breaking the law, but not mentioning something is ok.’ • ‘A business owner can be liable for comments made on their business’ social media by 3rd parties if those comments are misleading.’ • ‘A statement may be true in fact yet be considered misleading in law.’ True or False?
  5. 5. Faulty goods and/or returns… • A customer tries to return a good purchased from you that is faulty due to a manufacturing defect but you refer her to the manufacturer instead as that is where the source of the problem lies Signs in store or online: • ‘Be warned - No refunds given under any circumstances’ • ‘No refunds given for change of mind’ • ‘Refund given on demand for goods in original condition’ What are the implications, if any, of the above?
  6. 6. Consumer guarantees Consumer guarantees apply to: • goods or services of any type up to $40,000 in value (and...) • purchased but also leased and hired • online, over the phone or in person • both new & second hand Consumer guarantees do NOT apply to: • one-off sales (e.g. private sales such as car or garage sale) • buying to on-sell (e.g. car repairer purchasing parts to be used in repairs) • If consumers simply change their minds • If consumers misuse the goods • If purpose not specified and not obvious from the circumstances
  7. 7. Nine consumer guarantees applying to goods: • Acceptable quality (acceptable appearance & finish, free from defects, safe & durable) • Reasonably fit for purpose • Description is accurate • Goods match sample • Reasonable availability of spare parts & repair facilities for reasonable length of time • Voluntary (express) warranties to be satisfied • Suppliers guarantee clear title • Suppliers guarantees undisturbed possession • Goods to be free of hidden securities or charges If any of these guarantees are not met, the consumer has a right to a remedy.
  8. 8. Three consumer guarantees applying to services A supplier must meet the consumer guarantees of providing services: • with due care and skill • which are fit for any specified purpose • within a reasonable time (when no time is set) If any of these guarantees are not met, the consumer has a right to a remedy.
  9. 9. Consumer guarantees – important concepts • Major failure • Minor failure • Consequential loss • Rejection period • Trader’s v manufacturer’s/importer’s responsibility • Consumer guarantees v voluntary warranties
  10. 10. Misleading & Deceptive Conduct It is unlawful for a business to make statements in trade or commerce that: • are misleading or deceptive, or • are likely to mislead or deceive • Failing to disclose relevant information, promises, opinions and predictions can be misleading/deceptive • Advertisements, promotions, quotations, statements and any representations made by a person are included • ‘Small print’ and disclaimers no excuse • Overall impression considered
  11. 11. False & Misleading Representations • It is unlawful for a business to make false or misleading representations about goods or services when supplying, offering to supply or promoting them • An offence punishable by a fine of up to $220,000 for an individual and $1.1 million for a body corporate • Representations can be made: – Verbally or in writing – In person, online, over the phone or through correspondence – In packaging/promotional material – Through words, pictures or symbols or combination thereof
  12. 12. A business must not make false or misleading representations about: • standard, quality, value or grade of goods & services • place of origin of a product • buyer’s need for the goods or services and whether the goods are new (also their history & use) • sponsorship, approval, performance, benefits and uses of goods and services • price of goods and services • any guarantee, warranty or condition Also: • Whether a representation is misleading may depend on the characteristics of a specific group • A representation can be misleading even if it s true or partly true
  13. 13. Advertising & Selling • Comparative advertising (use with caution) – Is the comparison accurate? – Are the products/services similar? – Is the comparison valid for life of promotion? • Two-price advertising (use with caution) – Was / now price; RRP / sale price – Price comparisons must be accurate & genuine – Sufficient number of goods must be sold at previous price for reasonable period – Goods must be actually sold at RRP • Clarity in Pricing – If component prices are used, single total price must be provided
  14. 14. Unconscionable conduct • Under the ACL unconscionable conduct covers business to business transactions as well as business to consumer transactions • UC can be described as behaviour which is irreconcilable with what is right or reasonable and is seen as harsh and/or oppressive • Usually involves a stronger party exploiting its bargaining advantage to impose terms or conditions that are unreasonable or against good conscience towards a smaller or weaker party
  15. 15. Some examples of possible unconscionable conduct • Failing to disclose important contractual terms • Not allowing sufficient time for consumer to read agreement, seek advice, ask questions & decide • Refusing to deal with legitimate complaints • Not explaining terms of contract to consumers from NESB • Using friends/relatives to influence decision-making • Refusing to accept ‘No’ for an answer
  16. 16. Unfair contract terms • ACL enables a court to find a contract term unfair & declare it to be VOID (treated as if it never existed) • Applies to standard form contracts including written and oral – over the phone or face to face. • Applies to contracts entered into on or after 1 July 2010, and terms of contracts altered on or after 1 July 2010 • Contract remains binding to the extent that it can operate without the unfair term
  17. 17. Unfair contract term test • Does the term create a significant imbalance between rights and obligations of the two parties? • Is the term reasonably necessary to protect legitimate interests of the business? • Would the term cause a detriment (financial or non- financial) if the business tried to enforce it? • How transparent is the term?
  18. 18. Product Safety • Imposing mandatory safety standards • Product testing • Issuing public safety warning notices • Issuing compulsory recall notices • Banning unsafe products • Mandatory reporting www.productsafety.gov.au www.recalls.gov.au
  19. 19. Small business scams • Overpayment scams • Directory entry/unauthorised advertising scams • Domain name scam • Office supply scam • Email intercept scam • Ransomware scam
  20. 20. Protecting your business from scams • Have clear procedures for verifying, paying and managing accounts and invoices • Limit number of staff authorised to place orders & pay invoices • Keep filing & accounting system well organised • Make sure the business billing you is the one you normally deal with, verify ID of person speaking to you & who they represent • Install reputable computer protection software & firewall • Subscribe to scam notification service: www.scamwatch.gov.au • Do not agree to deals/offers straight away – if it sounds too good to be true, it probably is!
  21. 21. Selling goods online Whether you’re trading online or through a retail outlet, your customers’ legal rights are the same: •Right to accurate information •Right to a fair contract •Right to a safe product •Right to repair, refund or replacement Australian Guidelines for Electronic Commerce 2006 (Australian Government Treasury) – ‘Best Practice’ model
  22. 22. Restrictive Trade Practices • Cartel conduct (s.44) • Anti-competitive agreements (s.45) • Misuse of market power (s.46) • Exclusive dealing (s.47) • Resale price maintenance (s.48) • Prohibition of acquisitions (s.50)
  23. 23. New ACCC resource available Free online education program for small businesses on Australia’s competition and consumer laws www.ccaeducationprograms.org
  24. 24. Purpose & content of program • Access this free online education program, funded by the ACCC, to learn more about your rights & obligations under the Competition and Consumer Act 2010 • There are 10 modules, covering the following topics: Misleading conduct & advertising Consumer contracts Pricing & unfair selling practices Unconscionable conduct Consumer rights & guarantees Exclusive dealing Selling safe products Cartels Scams Misuse of market power
  25. 25. Further information • Call the ACCC Infocentre – 1300 302 502 • Visit www.accc.gov.au • Visit www.productsafety.gov.au • Visit www.scamwatch.gov.au • Visit www.consumerlaw.gov.au • Subscribe to the ACCC Small Business Information Network for regular fair trading email updates
  26. 26. Other useful agencies • NSW Small Business Commissioner (advocacy, advice & mediation) web: http://www.smallbusiness.nsw.gov.au Infoline: 1300-795-534 or 8222-4800 • NSW Fair Trading (education, licencing & compliance) web: www.fairtrading.nsw.gov.au Infoline: 13-32-20 • ASIC web: www.asic.gov.au Infoline: 1300-300-630
  27. 27. Open forum Any questions arising from the checklist or the presentation?
  28. 28. Small business self assessment checklist • You have 15 minutes to complete the checklist • Write down any questions that may come up for you • Feel free to discuss with your neighbour/s when finished

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