ACL CHANGES-AND WE ARE NOT TALKING ABOUT YOUR KNEE!
In June last year changes were made to the Competition and Consumer Regulations (2010) which come into effect on 9 June 2019.
Since 2011 the regulations have required businesses to supply warranties against defects for the supply of goods, but mandatory wording is now being extended to relate to both goods and services, or a combination of the two. An example of goods and services being provided together would be the sale of a TV together with installation services.
The Australian Consumer Law (ACL) is part of the Competition and Consumer Act and stipulates that most goods or services offered to consumers come with automatic guarantees as to those goods and services, which, if the goods or services are defective include the right:
- to a repair or replacement of goods,
- to have the service provided again, or a problem with the service to be rectified, or
- compensation or a refund.
The ACL applies to goods or services sold, hired or leased to consumers for:
- under $40,000, or
- Over $40,000, where the goods or services are normally used for personal or household use.
The mandatory wording is as follows:
For the Supply of Goods (wording remains the same)
Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.
For The Supply of Services
Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
- to cancel your service contract with us; and
- To a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to be compensated for any other reasonably foreseeable loss or damage. If the failure does not amount to a major failure, you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract.
For the Supply of Goods and Services
Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
- to cancel your service contract with us; and
- To a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done, you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service.
There are some exceptions where the mandatory wording is not required, namely in relation to a contract of insurance, certain types of services set out in the regulations and certain gas, electricity and telecommunication services.
There are fairly significant penalties for failure to comply with the regulations - $50,000 for a company or other incorporated business and $10,000 for sole traders, so this is a change to the law which can’t be ignored.
What to do next?
- Review your documentation if you provide services, or services in conjunction with goods and
- Insert the relevant wording where necessary, or
- Get professional help to assist you with reviewing your documentation and implementing the changes.