1st November, 2018 · Consumer Affairs Policy

Australian Consumer Law (ACL)

AADA Position

The AADA supports the ongoing process of reform of the ACL. Nevertheless, the AADA stresses that reform proposals must be balanced given the high-value and complexity of a modern motor vehicle. The AADA does not support the proposal for a refund or replacement of a motor vehicle within 30 days.

Background

The Australian Consumer Law (ACL) (contained in Sched 2 of the Competition and Consumer Act 2011) came into operation on 1 January 2011 and provides a single generic consumer protection law including a system of consumer protections and remedies in relation to defective goods and services known as ‘consumer guarantees’. These include:

  • a national unfair contract terms law covering standard form consumer and small business contracts;
  • a national law guaranteeing consumer rights when buying goods and services;
  • a national product safety law and enforcement system;
  • a national law for unsolicited consumer agreements covering door-to-door sales and telephone sales;
  • simple national rules for lay-by agreements; and
  • penalties, enforcement powers and consumer redress options.

Car manufacturers and dealers are under a legal obligation to comply with the requirements of the ACL’s consumer guarantees. Dealers, as suppliers of goods and services, must uphold their obligations under the ACL regardless of a manufacturer’s warranty policy and challenging procedures (compliance and audit), and without fear of damaging their commercial relationships with manufacturers.

The government has made some uncontroversial amendments to the legislation but is still considering options to improve the operation of the ACL. For new car dealers, some of the important issues still on the table relate to product failure in a short period of time, what constitutes a major failure, and disclosure requirements around extended warranties.

On 19 April 2017 Consumer Affairs Australia and New Zealand (CAANZ) released its final report on the review of the ACL identifying 19 legislative proposals, non-legislative actions and several topics requiring further research. The first package of minor reforms agreed to by Consumer Affairs Ministers are contained in draft Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. This Bill was introduced into the Parliament on 28 March 2018. It is currently before the Senate and is likely to be eventually passed without amendment.

The proposed provisions in this Bill generally represent a fine tuning of the ACL and ASIC Act to strengthen or clarify consumer protections. The amendments follow an extensive public review of the subject matter and the agreement of Commonwealth and state and territory Ministers.

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