Undeniably the biggest overhaul of consumer rights in decades, the Australian Consumer Law (ACL) has been a breakthrough for consumers.
But all is not well with the law introduced on 1 January 2011. One of its biggest problems is that so few Australians know anything about it.
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ACL combined 20 different state and federal laws into a single piece of legislation to offer uniform consumer rights across the country. Using its new powers under the ACL, the Australian Competition and Consumer Commission (ACCC) has already investigated unfair contracts of airlines, telecommunications and car-hire companies (see Cracking down on car-hire companies) – industries with the highest level of consumer complaints.
And, for the first time, the ACCC and state and territory fair trading offices can issue infringement notices.
There have already been some wins. In July 2011, the Federal Court fined Optus $5.3 million for misleading advertising of its broadband plans. The ruling judge said this will act as a deterrent to Optus and other traders who see misleading advertising as a profitable strategy.
Discovering that the new laws exist is one thing; understanding them is another. Though clarity was a goal, the fact that the laws define “consumer” in four different ways gives some idea of their complexity. Consumer law experts agree they turned out less than user-friendly.
Professor Stephen Corones from the Queensland University of Technology, who was involved in deciding how product warranties should be worded in the new laws, told CHOICE there were a number of different views about what the consumer definition should be during consultation but in the end it was agreed “we should adopt one definition uniformly”.
He believes the decision to steer away from the single definition was unfortunate because it detracts from the clarity of the law and cost effectiveness of compliance.
Professor Gail Pearson from the University of Sydney told us “the legislation does not fully realise the expectations of the community of simple, easily accessible rules”.
The Legislative and Governance Forum on Consumer Affairs Chair, John Rau, told us the ongoing education of both consumers and traders will be crucial to making the laws work. A key goal for consumers, he said, is “to be aware where they can get help when things go wrong”. Consumers can access fact sheets about the law and how it affects them on a daily basis at www.consumerlaw.gov.au.
Despite the shortcomings, the government appears to be behind the spirit of the new laws from both a consumer and business standpoint. Parliamentary Secretary to the Treasurer, David Bradbury, told CHOICE that “markets work more effectively when consumers are confident that they can transact with business knowing that there are clear rights and responsibilities, and when businesses are free to compete and innovate to serve consumer needs”.
The goal of the new consumer protections is laudable and long-awaited, but the effect of the new laws on transactions in the consumer marketplace will only be known as each new provision is put to the test.