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Heavy new penalties arrive for the Australian Consumer Law

1 min  27.08.2018 Katrina Alidenes, Paul Schoff, Miranda Noble

The Australian Consumer Law (ACL) has been amended to increase the maximum penalties that can be handed down for breaching the ACL.

The substantial increase aligns those maximum penalties with the current maximum penalties for contravening the competition provisions under the Competition and Consumer Act 2010.

What do these reforms involve?

  • The new maximum penalties are summarised in the table below and apply to breaches of various ACL provisions, including unconscionable conduct and specific prohibitions on false and misleading representations. These penalties will apply to acts or omissions occurring on or after the commencement date, which will follow royal assent.
  • This is a significant change to the penalty landscape particularly given the ACCC’s focus on seeking and obtaining higher penalties for ACL breaches. The Full Federal Court also indicated a preparedness to increase ACL penalties within the previous penalty framework.
  • It is prudent for businesses to revisit their current risk and compliance approaches to consumer matters, including reviewing their complaints handling systems (for example, to include an assessment of customers’ rights under consumer guarantees). 

Breach of ACL

Previous Maximum Penalties New Maximum Penalties
Corporations: $1.1 million Corporations: the greater of:


  1. $10.0 million;
  2. three times the value of the benefit; or
  3. if the benefit cannot be determined, 10% of annual turnover in the relevant twelve month period.
 Individuals: $220,000  Individuals: $500,000

 

Other ACL reforms

A further tranche of reforms are currently before Parliament in the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. Proposed amendments include extending protections for unconscionable conduct to publicly listed companies and extending the powers of the ACCC and ASIC to investigate unfair contract terms.

How can we assist your business in response to the ACL reforms?

  • Design and deliver tailored, up to date consumer law compliance training
  • Advise on compliance with the Australian Consumer Law
  • Assist with responses to regulatory investigations and information requests

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