Franchise consultants, DC Strategy discuss changes to commercial law

Franchise consultants, DC Strategy warn suppliers and manufacturers of consumer services, goods and warranties that they may need to consider whether their packaging, labels and representation of products can be guaranteed under new consumer protection laws that came into effect on the 1st of January.

The ‘Competition and Consumer Act 2010’ replaces the ‘Trade Practices Act 1974’ and applies to all goods bought on or after the 1st of January 2011, goods and services valued at less than $40,000 and for personal-use products valued at over $40,000.

The tougher legislation is designed to ensure suppliers and manufacturers uphold obligatory ‘consumer guarantees’ by replacing all laws on statutory conditions and warranties with a single national system of consumer guarantees.

These guarantees seek not only to ensure that product fitness and quality is maintained, but also that the goods match any descriptions made by the supplier, that warranties are complied with and that repairs are available within an acceptable time frame.

New commercial law also requires suppliers and manufacturers to provide accompanying text with products outlining the consumer’s rights in relation to faulty goods.
 
Failure to comply with new legislation may result in action by the Australian Competition and Consumer Commission (ACCC) and the company may have to;

• refund or replace faulty goods
• respond to legal action taken by the ACCC
• pay fines of up to $1.1M for companies or $220,000 for individuals who make false or misleading statements in promoting their product,
• respond to criminal sanctions in the most severe cases.