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 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).
Manufacturers for their part are required to indemnify Dealers who has been found liable to pay damages to a consumer under the consumer guarantees.
It is important that the process of Manufacturers managing a Dealer’s response to an ACL issue, including indemnification failures, is carefully considered by governments looking to make changes to the consumer law framework.