Changes to the Australian Consumer Law

KEY TAKE OUTS

• The monetary threshold under Australian Consumer Law (“ACL”) will increase from $40,000 to $100,000 from 1 July 2021.
• This means a consumer who purchases goods or services up to a value of $100,000 from 1 July 2021 will be able to rely on the consumer guarantees under the ACL.
• Businesses that supply goods or services up to a value of $100,000 will need to assess whether their goods and services will be subject to the requirements of the ACL.

Under the ACL, when a consumer buys a product or service, they come with automatic guarantees that they will work and do what you asked for.

Currently businesses must guarantee products and services they sell, hire or lease for:

• Under $40,000; or
• Over $40,000 that are normally bought for personal or household use; or
• Business vehicles and trailers which are mainly used to transport goods.

From 1 July 2021, the above monetary threshold will increase from $40,000 to $100,000. This means that consumers who purchase goods or services up to $100,000 on or after 1 July 2021 will be able to rely on the consumer guarantees and protections provided to them under the ACL.

What are the consumer guarantees?

Consumer guarantees provides consumers with an automatic right when they purchase a product or service. They include the following:

1. Products must be of acceptable quality, that is:
   • safe, lasting, with no faults;
   • look acceptable; and
   • do all the things someone would normally expect them to do.
2. Products must also:
   • match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising;
   • match any demonstration model or sample you asked for;
   • be fit for the purpose the business told you it would be fit for, and for any purpose that you made known to the business before purchasing;
   • come with full title and ownership meaning the supplier has the right to sell the goods, and you will own the product in full after purchase;
   • not carry any hidden debts or extra charges;
   • come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
   • meet any extra promises made about performance, condition and quality, such as lifetime guarantees, and money back offers;
   • have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.
3. Services must:
   • be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage;
   • be fit for the purpose or give the results that you and the business had agreed to;
   • be delivered within a reasonable time when there is no agreed end date.

What happens when a business does not comply with the consumer guarantees?

Businesses must provide consumers with the consumer guarantees which apply regardless of any express warranties given to consumers. If a business fails to deliver any of these guarantees, depending on whether there is a minor or major fault, a consumer has a right to a repair, replacement or refund. A consumer may also be entitled to cancel a service and in some circumstances, they may be entitled to compensation for damage and loss.

How to prepare for the changes to the ACL?

Businesses that supply goods or services up to a value of $100,000 will need to assess whether their goods and services will be subject to the requirements of the ACL. Businesses should also be aware of their obligations under the ACL and review their contracts to ensure they are compliant with the requirements of the ACL.

For advice and assistance on preparing for the changes to the ACL contact Coutts today.