Obligations To Your Clients: Consumer Law Advice
Written by: Gabrielle Andersen l Insight Team
Last month we examined employers’ obligations to employees and for our fifth instalment of our Commercial Law Series we’re looking at another important consideration for business owners – the obligations you hold to your customers or consumers.
Whether you sell products or services, your business needs consumers, and meeting the needs of your consumers can be crucial to your business growing and thriving.
The Australian Consumer Law
The Australian Consumer Law (the ACL) is used to describe a set of laws covering consumer protection and fair trading. The ACL is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) and as it is a national law, it applies equally to all Australian businesses across all states and territories. The ACL is administered by the ACCC, and each state and territory also has its own local consumer protection agencies.
In Victoria, Consumer Affairs Victoria is the official regulator in ensuring businesses are compliant with consumer laws. The Business Victoria website has a lot of useful information on the ACL and how it relates to businesses, and this can be a good place to start to understand your obligations as a business owner. On a national level, the ACCC has also produced a number of guidance papers on particular aspects of the ACL to help both consumers and businesses.
For businesses, being clear on the consumer law is not only an important step in adhering to your legal obligations to consumers, but it can also ensure that you are trading and operating in a fair way, which in turn will increase your business goodwill and reputation amongst consumers.
Fair Trading Laws
When you sell a product or a service, you must adhere to the fair trading regulations. These are also contained in the ACL, and relate to the standards placed on businesses in relation to the following matters:
- Businesses must provide contracts that are clear and fair. There have recently been new legal developments involving unfair contract terms, which reiterate that all standard form contracts (those given on a take-it or leave-it basis) must comply with the ACL. In particular, clauses in standard form contracts should not cause significant imbalance in the parties rights and obligations or cause detriment to the consumer. This is why having your business contracts relating to the sale of goods or services reviewed by a solicitor who understands the ACL can be crucial in ensuring you are meeting your legal obligations to consumers.
- Businesses are required to provide receipts for all amounts over $50, or if a customer asks for one. Businesses must also provide itemised receipts if requested by a customer.
- Businesses must have a clearly stated refund and exchange policy that complies with the ACL. For businesses selling goods it is important that you offer a refund or exchange if the goods are faulty, don’t match the product description, or are unfit for their intended purpose. This legal obligation is often misunderstood by business owners and can lead to reputational damage if customers complain about a business failing to adhere to these obligations.
- In 2019, the ACL was amended to provide consumer protection in relation to gift cards, including a new three-year minimum expiry period for gift cards.
Consumer Rights + Guarantees
The consumer guarantees refer to a set of automatic guarantees businesses provide to customers as soon as they sell a good or service. They are automatic rights and are essentially the minimum standards applied under the ACL.
The consumer guarantees state products must:
- Be safe and of acceptable quality and appearance;
- Do all the things expected;
- Match any description, demonstration or promise made by the business, salesperson, label or advertising;
- Not come with hidden debts or charges; and
- Have spare parts and repair facilities available for a reasonable time unless specified otherwise.
Any services must comply with the following guarantees:
- Be provided with acceptable care, skill and technical knowledge, and taking all necessary steps to avoid loss and damage;
- Be fit for the purpose or have the agreed results; and
- Be delivered within a reasonable timeframe.
Having a Service Agreement in place, or providing customers with clear terms and conditions in relation to your services, can be fundamental in ensuring you are meeting your obligations under the ACL. It can also assist with business goodwill in ensuring customers understand the service you’re providing, including its limits, and clearly state the purpose of the service and timeframes in relation to the provision of that service. As always, clearly documenting these matters and communicating them to your clients can go a long way in preventing issues down the track.
Managing Complaints
As much as we all want to avoid disagreements arising between our business and our customers, they can and will arise. Complaints and disagreements don’t, however, have to be damaging. Ensuring you are firstly aware of, and meeting, your obligations to consumers is a crucial first step in minimising any customer concerns if they have an issue with your product or service. If a customer complains, make sure you are reasonable and operating within the ACL in any response you provide. If matters escalate and you cannot find a solution with a customer it might be time to seek legal advice from a solicitor at Canny Legal who can offer consumer law advice.
Privacy Protection
An important aspect of your obligations to consumers is that of privacy protection. The Privacy Act 1988 governs the collection, storage and use of data. if your business is predominantly online you will also need to be aware of your obligations under the Spam Act 2003.
We have previously written about the importance of the laws relating to privacy and data breaches, and we would recommend that you review our article here: Privacy + Data Protection: Protecting Yourself + Your Clients In This New Era to ensure you understand this area and how it might relate to your business.
Broadly the government recommends the following in relation to the collection and use of customer data:
- If you’re collecting information about customers, it should be accurate, up to date, and secure from unauthorised access – including from employees and contractors who don’t need to see that information as part of their job.
- Provide a privacy statement and policy to customers which clearly outlines what information you’ll collect, what it will and won’t be used for, and provide your contact details if customers have any questions or issues to raise about the information you hold about them.
- Report any data breaches as soon as you are aware of them, which may also be via the Notifiable Data Breaches scheme.
Canny Insight is here to provide advice or assistance on any of the above, and in particular, we can help you prepare a privacy statement and policy tailored to your business.
How Canny Insight Can Help With Expert Legal Advice
Whether it is providing advice on the Australian Consumer Law, fair trading or the consumer guarantees, helping prepare service agreements and terms and conditions for your services, advice in managing any complaints or disputes about goods or services, or even preparing your privacy statement, Canny Insight is here to assist you.
Get in touch today to obtain advice, guidance and support so that you can best service your customers and meet your business goals.
